August 29, 2025: Porsche has shelved plans to produce its own EV batteries amid the global slump in take-up of electric vehicles.

The sports automaker subsidiary of Volkswagen said on August 25 it would not go ahead with its planned expansion of the production of high-performance batteries.

Battery development will now continue as an independent cells R&D unit only, in a move the firm said could lead to job cuts.

Porsche said it wanted to continue to use the knowledge acquired within its Cellforce lithium battery tech subsidiary and would continue to invest in all-electric models that use high-performance batteries.

VW’s PowerCo unit will use the independent R&D unit and place any development orders for high-performance cells there, Porsche said.

Oliver Blume, CEO of the VW Group and Porsche, said electromobility would remain an “essential drive technology” for the firm’s sports cars in the future. He said in the first half of 2025, 57% of vehicles delivered in Europe were electrified, compared to a global electric quota of 36%.

“However, due to challenging conditions, particularly in our main markets of the US and the not-yet-developed Chinese electric luxury segment, we are reorganizing our battery activities and focusing on cell and system development.

“For volume reasons and a lack of economies of scale, Porsche is no longer pursuing its own production of battery cells.”

Batteries International reported earlier this year that Asian EV battery tiger economy, South Korea, was scrambling to shore up the country’s faltering battery sector with an initial cash infusion worth close to $15 billion, as a global slump in EV sales took its toll on the industry.

In March, a Capgemini Research Institute report warned the global battery industry was reaching an inflection point and faced a myriad of urgent challenges to power a new generation of EVs and energy storage systems.

The report was based on a survey of 750 senior executives from large battery, automotive and energy and utilities across North America, Europe and the Asia-Pacific region, in which more than 50% cited difficulties in securing a stable supply chain for battery components and materials as an impediment to scaling production.