Porsche Is Increasing Car Prices Even After Turning a Profit in the First Quarter
What’s good for Porsche may not be good for you.
The German marque will raise prices by four to eight percent in the U.S. and Europe in the second half of the year to combat higher production costs.
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The move comes even after the automaker’s profits jumped by 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 also increased by 18 percent year-over-year, with 80,767 cars rolled out to collectors.
The previous year was, of course, impacted by serious disruptions in the supply chain that appear to be lingering. Porsche is still facing difficulties acquiring semiconductors and components for the high-voltage heating system in its all-electric Taycan, chief financial officer Lutz Meschke said on a call with reporters. He expects these issues to ease in the coming months, but economic uncertainties are still weighing on the industry.
As such, Porsche will hike prices to boost profitability. It’s already started, in fact. The nameplate raised the prices on Cayman and Boxster models earlier this year, as reported by The Drive. Meschke also added that the base prices for Porsche’s electric vehicles are likely to be 10 to 15 percent higher than the corresponding internal combustion engine models.
“The expectation when it comes to the BEV transition is that we can achieve a very high price premium,” the CFO added.
Tesla recently made the decision to cut prices on its EV lineup, but luxury brands like Porsche can perhaps afford to be more aggressive with increases.
“The key thesis on Porsche is that they can push pricing in this environment,” Bernstein analyst Daniel Roeska told Bloomberg. “If that’s not happening, that’s the worry.”
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