- Porsche will no longer pursue plans to make its own high-performance battery cells, calling the pursuit “not economically viable.”
- The carmaker said slower demand for EVs in the U.S. was part of the reason why it shelved its battery plans.
- Porsche’s battery division, Cellforce, will shift focus to R&D instead.
Porsche is abandoning plans to make its own high-performance electric vehicle batteries due to slower-than-expected demand for EVs and “challenging conditions” in the U.S. and China.
On Monday, the company announced that its battery division, Cellforce, will scale down operations and shift focus to cell research and development. Battery production is brutally expensive, requiring billions of dollars in upfront investment and scale that’s tough to achieve. And Porsche said it no longer saw a viable path forward for producing its own cells, given the pace at which the EV market is developing.
“For volume reasons and a lack of economies of scale, Porsche is no longer pursuing its own production of battery cells,” Oliver Blume, CEO of both Porsche and its parent company, the Volkswagen Group, said in a statement.
Photo by: Porsche
Porsche’s EV sales are growing. EVs and hybrids made up 36% of the automaker’s global sales in the first half of 2025.
About 60% of the Macan’s 45,137 sales worldwide in the first two quarters of 2025 were the fully electric trims, which is nearly 26,000 units. And in the second quarter of this year, Taycan sales in the U.S. increased 31% year-over-year, from 807 units to 1,064 units.
However, Porsche isn’t alone in saying that the market is developing slower than it expected. And policy changes in the U.S., the brand’s most important market, are having ripple effects across the EV industry. Slower EV demand in the U.S., rollbacks to fuel economy regulations, the looming end of EV tax credits that spur sales and a broader rollback of clean energy programs under the Trump administration all mean that Porsche’s gas cars may have a much longer future than it had planned for.
“Unfortunately, the market for electric vehicles worldwide has not developed as originally thought. The framework conditions have changed fundamentally and we have to react to them,” said Michael Steiner, Member of the Executive Board for Research and Development at Porsche. “We have to conclude that the planned business model is not economically viable.”
Cellforce had developed cells and started pilot production, Porsche said. The original plan was for the unit’s factory in southern Germany to produce one gigawatt-hour of batteries per year, about enough to supply 10,000 Taycan sedans. That was to be followed up by a larger second plant.
Now Porsche says Cellforce’s R&D efforts will support the wider Volkswagen group and V4Smart, a battery company Porsche acquired this year. It supplies the high-performance cells for the 911 GTS hybrid sports car.
Reuters reported that 200 of the nearly 300 Cellforce workers would be let go, citing a source familiar with the matter. The remaining workers could be offered roles at parent company Volkswagen Group’s battery subsidiary PowerCo, Porsche said. PowerCo will also use the R&D facility.
2025 Porsche Taycan 4S Cross Turismo
Photo by: Patrick George
For European battery companies, it’s an incredibly tricky period. China’s battery makers not only have a stranglehold over the supply chains, but their production is mature and they can sell high-tech batteries to Western brands at lower costs.
Swedish battery maker Northvolt was an emerging European rival to China’s battery makers, but it filed for bankruptcy in the U.S. last year after burning through billions of dollars and failing to achieve the required production and scale.
Now, smaller in-house battery bets like Porsche’s are being shelved, while larger players are compelled to recalibrate. LG Energy Solution, for instance, is doubling down on grid-scale storage batteries as EV sales grow unevenly.
CATL supplies the batteries for the popular Macan Electric, whereas LG Energy Solution supplies the cells for the Taycan. And Porsche has more EVs in the pipeline, notably the Cayenne Electric and an all-electric sports car in the 718 family.
Global and U.S. EV battery production is still growing, but the growth is being led by fewer, more powerful, and larger players, such as CATL, BYD and LG Energy Solution, among others. Smaller battery makers are facing the wrath of the brutal economics of this business.
The Volkswagen Group’s own battery plans are underway in full swing, too. It has invested millions of dollars in raw material sourcing, next-generation solid-state batteries and three large battery plants scheduled to come online in Spain, Germany and Canada.
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