What’s good for Porsche may not be good for you.
The German brand will raise prices by four to eight percent in the US and Europe in the second half of the year to combat rising production costs.
The move comes even after the automaker’s profits rose more than 25 percent in the first quarter. Porsche reported revenue of $11.1 billion (€10.1 billion) in the first three months of 2023 and an operating profit of $2 billion (€1.84 billion). Deliveries were also up 18 percent year-on-year, with 80,767 cars distributed to collectors.
The previous year, of course, was marred by severe supply chain disruptions that appear to be lingering. Porsche is still struggling to procure semiconductors and components for the high-voltage heating system of its all-electric Taycan, Chief Financial Officer Lutz Meschke said on a call with reporters. He expects these problems to ease in the coming months, but economic uncertainties continue to weigh on the sector.
As such, Porsche will raise prices to increase profitability. It has already begun, in fact. The nameplate raised the prices of the Cayman and Boxster models earlier this year, it reported the unit. Meschke also added that base prices for Porsche electric vehicles are likely to be 10 to 15 percent higher than corresponding internal combustion engine models.
“The expectation when it comes to the transition to the BEV is that we can achieve a very high price premium,” the CFO added.
Tesla recently made the decision to lower the prices of its line of electric vehicles, but luxury brands like Porsche can perhaps afford to be more aggressive with the increases.
“The key thesis about Porsche is that they can drive prices in this environment,” Bernstein analyst Daniel Roeska told Bloomberg. “If that doesn’t happen, that’s the concern.”
