Porsche isn’t having the best time right now. Fresh from admitting that operating profit plummeted 93 percent in 2025, the automaker has revealed that sales in the first quarter of this year sank 15 percent to 60,991 cars, down from 71,470 a year ago.

The company says it saw this coming due to the end of 718 production and Macan Electric sales settling down after the flurry of interest at last year’s debut. But there’s a problem looming ahead that could make things worse before they get better.

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The biggest red flag sits right in the middle of Porsche’s lineup. The Macan, previously the brand’s best selling model, managed 18,209 deliveries, down 23 percent, but here’s the kicker. More than half of those, 10,130 units, were still combustion versions, while the electric version accounted for only 8,079, down a massive 43 percent from last year. With the ICE Macan heading for the exit this summer, and no replacement due for a couple of years, Porsche is about to lose its volume backbone.

911 Is Growing, But Nothing Else Is

Elsewhere, the Cayenne kept things relatively steady with 19,183 deliveries, down just 4 percent, and with Macan sales falling, the bigger SUV is now the most bought. And the 911 is out here ignoring the downturn entirely. Sales of the iconic sports car jumped 22 percent to 13,889 units, proving once again that heritage still sells, even when the broader market gets shaky.

But most Porsche models ended Q1 battered and bruised. The Taycan dropped 19 percent to 3,420 units, while the Panamera plunged 42 percent to 4,498 – due to a model transition, Porsche claims – particularly in China. The 718 range, now effectively retired, collapsed 60 percent to just 1,792 cars.

Porsche Q1 Sales By Model

The regional picture doesn’t help much either. North America remained Porsche’s biggest market with 18,344 deliveries, though that’s down 11 percent, likely not helped by changing incentives and tariff pressures. Europe excluding Germany fell 18 percent to 14,710, while overseas markets dropped 20 percent to 12,640.

China Woes Worsen

China has been a problem for a while, and deliveries in the country sank 21 percent to 7,519 units as domestic brands tighten their grip on the premium space. Porsche says it’s focusing on value over volume there, but that’s often what companies say when volume disappears.

Put it all together and Porsche’s explanation about product timing only tells part of the story. Between a cooling EV market, rising competition, and the imminent loss of the ICE Macan, the next few quarters could get even more uncomfortable.

Porsche Q1 Sales By Region

Porsche

Porsche has outlined a recovery plan after a bruising year, aiming to streamline operations and cut costs as it works to regain its financial footing. Under new CEO Michael Leiters, the former McLaren and Ferrari executive, the company hopes to restore its reputation as a profit powerhouse while reshaping itself into what Leiters calls a “leaner, faster, and even more desirable” brand. He took over at the start of the year, replacing Oliver Blume.

A Year Of Tough Numbers

The reset follows a difficult set of results. Porsche’s operating profit plunged 92.7% from €5.64 billion ($6.55 billion) in 2024 to just €413 million ($479 million) in 2025. Revenue also slipped, falling 9.5% to €36.27 billion ($42.10 billion). Operating return on sales shrank to a narrow 1.1%, while global deliveries dropped to 279,449 units, down 10.1%.

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Several factors combined to produce that outcome. Porsche booked €3.1 billion ($3.6 billion) in one-time restructuring charges, absorbed €700 million ($813 million) related to US tariffs, and faced a steep 26% drop in sales in China.

Porsche CFO Dr. Jochen Breckner said: “The global challenges and the company’s realignment impacted earnings in 2025. In 2026, our recalibrations measures will continue to have one-off effects on earnings in the high three-digit million euros range. In order to secure adequate margins by Porsche standards in the medium term and strengthen our resilience in the long term, we accept these burdens.”

The Solution

During Porsche’s annual press conference in Stuttgart, Leiters acknowledged that the turnaround plan is still taking shape. With the new leadership only just past its first 100 days, he admitted the company does not yet have “an answer to every question or a solution for every problem.” Even so, he used the event to outline the direction Porsche intends to take.

“We will streamline our management structure, reduce hierarchies and cut back on bureaucracy. We have also already begun to focus more strongly on our core business. We are using the current challenges as an opportunity to act even more decisively. We will comprehensively reposition Porsche, make the company leaner, faster and the products even more desirable.”

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Porsche is also planning significant changes in China, where the company intends to shrink its dealer network from 150 outlets to just 80 by the end of 2026 in an effort to protect pricing power.

Expanding The Lineup

To stop the bleeding, Leiters is looking upmarket. One of the first moves will be to simplify Porsche’s product portfolio by cutting complexity and reducing the number of variants. According to the CEO, the changes will focus on models with weaker demand, which likely points to the Taycan. Even so, Porsche says it plans to introduce “emotive new derivatives” of certain models later this year, though it has not revealed exactly which ones.

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At the same time, Porsche’s boss confirmed the company is developing new models aimed squarely at higher-margin segments. “We stand for uncompromisingly good sports cars that you want to drive yourself, that are fun, that convey performance and passion. And all this regardless of the type of powertrain,” said Leiters.

“We are considering the expansion of our product portfolio in order to grow in higher-margin segments. In doing so, we are looking at models and derivatives both above our current two-door sports cars and above the Cayenne,” he added

Porsche’s Next Halo Car?

The reference to two-door sports cars clearly points to the 911. What might sit above it is less clear. Leiters did not elaborate, but the possibilities range from a modern interpretation of the 928 to something far more exotic, such as a supercar or even a flagship hypercar.

Read: Porsche 928 Conceptualized As A Modern Electric Coupe For 2030

Porsche has been exploring that territory for years, with potential successors to the 918 Spyder. The Mission X concept hinted at one possible direction before enthusiasm for electric hypercars cooled.

The other confirmed project is a long-rumored three-row SUV flagship positioned above the Cayenne. Codenamed K1, it is expected to target markets such as the United States and the Middle East and could offer V6 or V8 powertrains.

The new offerings will benefit from the expansion of “high-margin customization programs” that will “further strengthen the exclusivity of the brand” helping it move into a new territory closer to the likes of Ferrari and Lamborghini.

ICE Life Support And EV Reality Check

Leiters acknowledged that Porsche needs to rethink what he called “the right drive technology.” Early momentum behind the fully electric Taycan has run into a tougher reality as regulations, demand patterns, and customer expectations have shifted in recent years. Slower-than-expected demand has forced the company to “adjust the ramp-up and portfolio of fully electric vehicles while extending the life of combustion and hybrid offerings.”

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The ultimate goal is to reduce upfront and direct costs by “fundamentally rethinking the development of our sports cars.” In the process, Leiters effectively confirmed earlier reports that the next generation of the 718 series will follow a multi-energy path. Porsche also plans to “leverage further synergies between our models,” using platforms and industry solutions more flexibly.