Where would Western luxury automakers be today without the Chinese market? Prestige brands have been riding the gravy train for years, but all good things must come to an end. The rise of domestic automakers has severely impacted demand for international brands; ask Porsche. Its sales in China slipped by 28 percent in 2024 to 79,283 cars. The first quarter of this year has been even worse, with demand plummeting by 42 percent to 9,471 units.
Porsche’s downfall isn’t because the 911 suddenly became undesirable. The real issue stems from an inability to fend off Chinese competition in the EV segment. Xiaomi and others sell much cheaper electric cars, some of which boast more power than a Taycan or a Macan. Zuffenhausen is fully aware of the problem, and rather than retaliating with price cuts or new, more affordable models, it might just call it quits.
Speaking at Auto Shanghai 2025, Porsche CEO Oliver Blume admitted the company might stop selling EVs in China in the foreseeable future: “We will see in the next two to three years whether Porsche exists as an electric brand here.” The head honcho, who also runs the Volkswagen Group, acknowledged that Porsche’s electric vehicle sales in China are “relatively low,” as cited by Automotive News.
The top brass made it crystal clear that Porsche has no intention of chasing volume and will maintain prices at a level “appropriate for Porsche.” Consequently, the new Cayenne EV, coming later this year, won't be cheap, and neither will the electric 718 successor due to arrive after the big SUV.
Blume doesn’t view Xiaomi, with its 1,548-horsepower SU7 Ultra, as a direct competitor, arguing that it’s a cheaper EV that can’t match the “driving ability” of a Porsche. Xiaomi’s Taycan fighter costs 529,900 yuan (nearly $73,000) in China, while a base 402-hp Taycan starts at a much steeper 918,000 yuan ($126,000).
Unlike BMW, Mercedes, Audi, and even Jaguar, Porsche has not invested in China-specific models. Global players have poured money into long-wheelbase sedans and SUVs to enhance legroom for rear passengers. Audi recently went a step further by launching the confusingly named AUDI (written in capital letters) as a purely electric sub-brand. Fun fact: VW's Jetta is also a separate brand there.
Xiaomi SU7 Ultra
Speaking of VW, it's planning to launch 20 plug-in hybrids and EVs in China by the end of 2027, but there’s seemingly nothing on the horizon from Porsche regarding localized products. That new gas crossover to replace the Macan would make sense, but it’s not expected until closer to the decade’s end. Other traditional luxury automakers have adapted to maintain their market share. Relevant examples include posh minivans like the Lexus LM, Buick GL8, and Volvo EM90.
However, with Chinese brands having easier access to raw materials and benefiting from lower labor costs, it is becoming increasingly difficult for international players to compete. Beating them on their own turf seems impossible now. Some automakers have come to grips with the new, harsh reality, deciding instead to strengthen local alliances. As the saying goes: "If you can’t beat ‘em, join ‘em."
Source: Automotive News
