Porsche has abandoned its EV battery production plans

Due to a lack of volume worldwide, Porsche has abandoned its plans to produce EV batteries. With the market for electric vehicles significantly reduced, the automaker is now pivoting to cost-effective strategies and scaling back production. 

The German luxury carmaker Porsche AG has scrapped its plans to produce high-performance electric vehicle (EV) batteries through its subsidiary Cellforce, further hindering Europe’s ambitions of building a competitive domestic battery industry.

Porsche has abandoned its EV battery production plans

In a statement on Monday, Porsche said Cellforce will now transition into an independent research and development (R&D) unit rather than pursue large-scale battery production. The change will also bring significant job losses, with about 200 of the nearly 300 positions at the subsidiary expected to be cut, according to a person familiar with the matter.

“Porsche is not pursuing its own battery cell production for reasons of volume and lack of economies of scale,” Oliver Blume, the CEO of both Porsche and its parent company Volkswagen said.

Asia, particularly China, Japan, and South Korea, continues to dominate the EV battery sector, supplying most of the world’s lithium-ion batteries.

Europe had hoped to change this through government support and industry investment, but the collapse of Swedish battery maker Northvolt earlier this year already rattled confidence in the region’s ability to scale up battery manufacturing. Porsche’s withdrawal from Cellforce’s production plans compounds those concerns.

Porsche originally announced its ambitious plans for Cellforce in 2022, aiming to construct a “start-up factory” in Baden-Wuerttemberg, Germany, with the long-term goal of expanding to a larger second location.

But by April 2025, the company acknowledged it would no longer pursue the expansion. On Monday, it cited a “lack of volume worldwide” and an inability to scale up production to meet cost targets as the decisive reasons behind the change.

“Due to a lack of volume worldwide, it is not possible to scale up its own production to the planned cost position,” Michael Steiner, Porsche’s executive board member for research and development said.

Volkswagen’s new battery strategy

While Porsche has abandoned its original battery manufacturing plans, the company emphasized that Cellforce’s technological expertise will not be lost. Instead, the subsidiary will focus on R&D, with the aim of feeding knowledge and innovations into other parts of Volkswagen’s battery strategy.

Some jobs at Cellforce could potentially move to PowerCo, Volkswagen’s dedicated battery unit. Porsche also noted that Cellforce’s research strengths would support V4Smart, the automotive battery unit it acquired from German battery maker Varta earlier in 2025.

European automakers are increasingly consolidating efforts into joint ventures and centralized units to achieve scale. For Volkswagen, PowerCo is a key part of its strategy to secure battery supplies and reduce reliance on external providers.

Global demand for electric vehicles has slowed in recent months, particularly in China and the United States, which are two of the largest EV markets. The fall in demand has forced automakers to rethink investments, scale back production plans, and focus on cost efficiency.

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