• Porsche will launch a combustion-engine Macan in 2028, reversing its earlier EV-only plan for the SUV.
  • The move comes after electric Macan sales fell 40% in H1 2026, while China deliveries plunged 32%, prompting a broader restructuring that includes 9,000 job cuts by 2035.
  • CEO Michael Leiters insists EVs remain central to Porsche’s future, but higher costs continue to pressure margins, forcing a multi-powertrain strategy.

Porsche AG (P911.DE) is reviving its petrol strategy, with a combustion-engine Macan planned for 2028 after electric Macan sales fell 40% in the first half of 2026. The German luxury automaker is not abandoning electric vehicles, but rather rebalancing toward a multi-powertrain approach after weaker demand—especially in China—and a costly EV transition squeezed volumes and profitability.

CEO Michael Leiters has publicly defended the return to a stronger petrol offering, arguing that a petrol Macan in 2028 will restore a more balanced choice between electric and combustion vehicles. He says Porsche still sees EVs as central to its future, rather than treating this as an EV exit. The immediate move is a new combustion vehicle in the Macan segment, alongside continued EV and hybrid development.

Fragile Demand

The strategic shift comes as Porsche’s first-half 2026 global deliveries fell 16% year on year to 122,306 vehicles. China, once one of Porsche’s most important profit pools, saw deliveries plunge 32% to 14,501 units, underscoring the severity of the decline. The headline’s 40% decline refers specifically to electric Macan sales, reflecting both softer EV demand and difficult product-transition comparisons. Combustion Macan deliveries increased modestly, with 19,695 units sold versus 15,620 electric Macans.

While demand has weakened, Porsche has managed to improve margins through pricing and cost discipline. H1 2026 operating profit rose 33.9% year on year to €1.35 billion, and operating margin recovered to 7.8% from 5.5%. Still, that is well below the company’s historic profitability—2025 operating margin was just 1.1%, down from 14.1% in 2024. Revenue for H1 2026 came in at €17.23 billion, down from €18.16 billion.

“Institutional investors like us are really focused on regulatory stability,” Leiters said at a recent industry conference, referring to Italy’s regulatory climate—though his comments echoed Porsche’s broader need for predictable policy as it navigates the EV transition. “Italy in this regard has been on a very steady growth trajectory.”

Restructuring and Job Cuts

Porsche’s workforce agreement calls for 5,000 additional cuts through 2035, on top of about 3,900 previously agreed reductions and roughly 500 cuts linked to subsidiary closures. The aggregate total is about 9,000 positions—around one-fifth of the workforce—primarily through voluntary measures and natural attrition rather than compulsory layoffs. In exchange, Porsche committed €2.1 billion of investment in Zuffenhausen and Weissach and guaranteed sites through 2035.

The company is also reportedly pooling EU fleet emissions with Chinese EV maker Xpeng (XPEV) for 2026–27. That arrangement can help Porsche meet fleet CO₂ rules despite a product mix tilted toward high-emission performance and combustion models. The move underscores the tricky regulatory environment in Europe, where fleet-emissions rules still pressure manufacturers to lower average CO₂ emissions.

A Delicate Balance

The transition gap is important. The old combustion Macan could not continue in Europe because of UN R155 cybersecurity-compliance requirements that took effect in July 2024, not simply because Porsche wanted to stop selling it. Porsche continued producing it for certain markets outside the EU until July 2026. The successor arrives after the 2027 financial year.

Leiters’ emerging strategy has several parts: protect the 911 and other high-margin luxury/performance models; reduce fixed costs and complexity; offer EVs, hybrids and combustion vehicles simultaneously for longer than earlier plans implied; and restore a combustion entrant in the Macan-sized segment.

For Germany’s wider economy, Porsche’s cuts are significant beyond the company itself. Automaking supports suppliers, engineers, logistics firms, dealerships and regional manufacturing clusters. The broader German auto sector is already shedding jobs and facing labor disputes over work hours, pay and plant security.

Porsche’s maintained 2026 guidance of 5.5%–7.5% operating margin and €35–36 billion revenue suggests management expects stabilization, not a rapid restoration of former margins. The company declined to comment on specific product plans beyond 2028, but analysts say the success of the combustion Macan will depend on whether Porsche can make it compliant, differentiated and profitable while meeting tightening emissions rules.

Correction: An earlier version of this article misstated the timing of the combustion Macan’s discontinuation in Europe. It was phased out due to cybersecurity regulations, not solely because of Porsche’s EV strategy.