Porsche pares e-bike ambitions amid margin squeeze

Porsche AG will shut down its e-bike drive-system subsidiary as part of a wider restructuring that underscores a sharper turn back towards its core sports-car business after weaker sales, tariff pressure and a costly recalibration of its electrification plans. The decision affects Porsche eBike Performance GmbH, the unit set up to develop high-performance electric bicycle drive systems for global markets, and forms part of a package that will also discontinue two other subsidiaries, Cellforce Group GmbH and Cetitec GmbH. More than 500 employees are affected across the three businesses.

Porsche said operations at Porsche eBike Performance’s sites in Ottobrunn, Germany, and Zagreb, Croatia, will be closed, putting around 350 jobs at risk. The company cited fundamentally changed market conditions for e-bike drive systems and said the move was aligned with its strategic focus on the main vehicle business. Chief executive Michael Leiters said Porsche had to “refocus on its core business”, calling the cuts painful but necessary for the group’s realignment.

The retreat marks a notable reversal for a brand that had moved aggressively into premium e-bikes during the pandemic-era cycling boom. Porsche launched its eBike Sport and eBike Cross models in 2021 with long-standing partner Rotwild, then expanded its position in 2022 by taking full control of Fazua, a Munich-based specialist known for lightweight e-bike drive systems. Fazua was later folded into Porsche eBike Performance, while Porsche and Ponooc Investment BV created ventures aimed at developing next-generation Porsche-branded e-bikes and broader micromobility technology.

That expansion now appears to have run into a weaker demand cycle and tougher economics for premium electric bicycle components. Porsche-branded e-bikes are expected to remain on sale through partner-built models, but the company is ending its in-house push to produce and market its own drive systems. For the bicycle industry, the decision raises questions over long-term support for Fazua-equipped bikes supplied to third-party manufacturers, although service and spare-parts arrangements are expected to remain a key issue for dealers and customers.

The e-bike closure is only one element of a broader portfolio clean-up. Cellforce Group, based in Kirchentellinsfurt, is being discontinued after Porsche concluded that its battery-cell development operation no longer had a sufficiently viable long-term perspective within a technology-open powertrain strategy. Around 50 employees are affected there. Cetitec, based in Pforzheim, developed specialised data-communication software for Porsche and the Volkswagen Group; around 60 employees in Germany and 30 in Croatia are affected as development priorities shift.

The restructuring comes after Porsche’s first-quarter operating profit fell to €595 million from €762 million a year earlier, while sales revenue declined 5.2 per cent to €8.4 billion. Deliveries dropped 14.7 per cent to 60,991 vehicles, with China including Hong Kong down 20.6 per cent and North America excluding Mexico down 11.4 per cent. Porsche’s operating return on sales stood at 7.1 per cent, compared with 8.6 per cent a year earlier, though the company said the result remained within its full-year expectations.

The company’s model mix shows why management is tightening its focus. The Cayenne remained Porsche’s largest delivery line at 19,183 units in the first quarter, while the 911 rose 21.9 per cent to 13,889 units, underlining the continuing strength of the brand’s high-margin core. By contrast, Macan deliveries fell 22.7 per cent, Taycan deliveries slipped 18.6 per cent, and the 718 Boxster and Cayman line dropped sharply as the series is phased out. Battery-electric vehicles accounted for 19.8 per cent of automotive deliveries, down from 25.9 per cent a year earlier.

Porsche is also trimming non-core holdings. Last month, it agreed to sell its 45 per cent stake in Bugatti Rimac and its 20.6 per cent holding in Rimac Group to a consortium led by HOF Capital, with completion subject to regulatory approvals. The divestment, alongside the e-bike, battery and software closures, points to a narrower capital-allocation strategy under Leiters, who took charge at a time of weaker luxury demand in China, volatile trade policy and slower-than-expected electric vehicle adoption.