On July 29, Porsche released its financial results for the first half of 2026, revealing a performance marked by a decline in sales but an increase in profitability. The German sports car manufacturer reported that while global deliveries continued to drop, its profit margins improved significantly compared to the same period last year.

According to the report, Porsche generated revenue of €17.229 billion in the first half, a 5.1% decrease from the €18.157 billion recorded in the prior-year period. Operating profit rose to €1.348 billion from €1.007 billion, marking a 33.9% year-on-year increase. The return on sales improved to 7.8% from 5.5% a year earlier, while the EBITDA margin for the automotive business increased to 18.3% from 16.0%.

The improvement in profitability was primarily driven by the automotive segment. Operating profit from this unit climbed to €1.208 billion, up from €832 million in the same period last year, and its operating margin rose to 8.0% from 5.2%. Porsche attributed these gains to strict price management, cost control, and an optimized product mix.

However, a key factor behind the profit recovery was the low base of comparison from the prior year. In the first half of 2025, strategic adjustments resulted in net costs of approximately €800 million, whereas this figure dropped to about €100 million in the same period of 2026. Chief Financial Officer Jochen Breckner stated that the results were in line with expectations.

On the sales front, pressure remained evident.

Porsche delivered 122,306 vehicles globally in the first half, a 16.5% decline compared to the previous year and the lowest first-half total since 2020. All major markets experienced declines: North America, still the largest market, saw deliveries fall 13% to 37,712 units; Europe (excluding Germany) dropped 14% to 30,278 units; and Germany itself recorded a 6% decline to 14,938 units.

The most significant downturn occurred in China.

Porsche delivered 14,501 vehicles in China during the first half, a 31.93% decrease year-on-year. This rate of decline was roughly double the global average. China's contribution to Porsche's global sales fell to 12% from 15%. This contrasts sharply with 2021, when Porsche's sales in China hit a historic peak of 95,700 vehicles.

Porsche attributed the slump in China to the macroeconomic environment and intense market competition. During the earnings call, management noted that growth in the Chinese market has slowed, with particularly fierce competition in the luxury car segment. The company emphasized its strategy in China is "value over volume," prioritizing profitability over sales scale. Porsche also highlighted that it has no local production capacity in China, allowing flexibility to adjust European production and plans.

Regarding electrification, Porsche's share of fully electric vehicles fell to 19.4% in the first half, down from 23.5% in the same period last year. Deliveries of new energy vehicles totaled approximately 23,700 units, a 30.8% decline year-on-year.

Porsche explained that this was mainly due to the expiration of electric vehicle tax incentives in the U.S. and a transition period between old and new models, such as the all-electric Macan. Specifically, Macan series deliveries fell 22% to 35,315 units, comprising 19,695 internal combustion engine versions and 15,620 fully electric units. In contrast, the 911 model saw a 19% increase year-on-year, becoming one of the few models to buck the downtrend.

On the product front, Porsche is adjusting its electrification pace in China. In early July, the company stopped accepting new personalized orders for the Taycan and all-electric Macan in mainland China, limiting customers to purchasing only available stock or vehicles in transit. The new all-electric Cayenne is expected to begin deliveries around the end of the year. This means that from July through the end of 2026, Porsche will face a delivery gap for electric models in China.

Amid the dual reality of falling sales and rising profits, Porsche also unveiled its "2035 Strategy." This plan focuses on four areas: controlling costs, concentrating on core products, improving operational efficiency, and managing investments rationally.

On the execution front, Porsche announced on July 27 that it would cut an additional 5,000 positions in Germany by 2035. Combined with previously announced layoffs, this brings the total reduction of jobs in Germany to approximately 8,900.

Despite the profit rebound in the first half, Porsche did not raise its full-year outlook.

The company maintained its guidance for full-year revenue of €35 billion to €36 billion and a return on sales of 5.5% to 7.5%. Porsche stated that the second half of the year will see the launch of previously announced organizational adjustments, which are expected to generate several hundred million euros in restructuring costs.

CEO Michael Leiters commented in the report that the company has steadily advanced its strategic adjustments over the past six months and achieved interim results. However, facing a complex market environment, Porsche still needs to further enhance its competitiveness and profitability.