Porsche to raise prices significantly to sustain 2022 profits

Porsche will impose “significant price increases” on its cars in the middle of this year to keep its profits high, its chief financial officer has told investors.

The Volkswagen Group-owned company also said it would price its future electric versions of the Porsche Macan, Porsche 718 Boxster and Porsche Cayenne 10-15% higher than ICE versions, which will remain on sale.

Porsche’s sports car range currently starts at £47,700 for the 718, while the cheapest four-door is the entry Macan, starting at £50,800 in the UK.

Finance head Lutz Meschke made the pricing announcements on a call with analysts to reassure them that Porsche can continue to build on 2022’s strong operating profits of €6.8 billion (£6bn) in 2022 with an 18% return on sales.

Porsche aims to hit a 20% return “in the long term” as part of its Road-to-20 strategy.

“We will see significant price increases in the middle of the year for the new model year. That will help a lot to make sure we make strong group operating margins,” Meschke said.

Porsche is currently in the middle of a spending push to invest in new EVs that have raised its R&D and capital expenditures to a higher level than it would ideally like. Those expenditures would “peak” in 2023/2024, Meschke said.

The increased cost of EVs is also weighing on the brand as it shifts towards its goal of 50% electric and plug-in hybrid sales by 2025 and 80% electric sales by 2030.

“We set ourselves a very ambitious goal when it comes to group return on sales of 17-19% in the mid-term, and that means we have to reach parity between BEV and ICE as soon as possible, otherwise this forecast wouldn’t work,” Meschke said.

The electric Macan will go on sale in 2024, with the electric 718 and Cayenne following “in the middle of the decade”. A larger electric SUV dubbed K1 – based on the new Porsche-developed Sport version of the Volkswagen Group's new SSP platform – will arrive after that.

Meschke said that the 10-15% price increase for the EV versions of the Macan, Boxster and Cayenne is “a huge factor on the turnover side” of Porsche’s ambitious targets.

Porsche believes customers would accept higher prices across the board.

“We have a very good foundation with a very strong brand and a very strong customer base that gives us the power to increase prices in very challenging times and in an intelligent manner,” Meschke said.

Porsche added that the price increases for the Cayenne will coincide with a major overhaul for the SUV. The changes will include a larger battery for PHEV models to increase electric-only range to 80km (50 miles), Porsche CEO Oliver Blume said on the same call.

The Porsche Panamera PHEV will also gain the upgraded battery pack, he said.