In 2021, Porsche confidently declared, “The battery cell is the combustion chamber of the future,” signaling its ambitious transition from internal combustion expertise to electric vehicle innovation. This confidence led Porsche to acquire a German battery company, Cellforce, with plans to develop high-performance, energy-dense battery packs worthy of the Porsche badge for electric sports cars.
However, by the first quarter of 2025, Porsche took a massive financial hit, writing off €700 million that mostly covered its investment in Cellforce and other battery-related activities. The once bold vision to scale Cellforce into a large-scale battery producer has been drastically curtailed.
Originally aiming for battery production capacities up to 20 GWh, Porsche’s battery division faced technical setbacks, including frequent shifts between different cell designs like pouch, prismatic, and round cells. These technical zigzags, combined with high costs of European equipment manufacturing and a lack of economies of scale, rendered the expansion financially unsustainable.
Cellforce, headquartered in Kirchentellinsfurt, Germany, has now been scaled back to a research and development unit only. The company plans to lay off approximately 200 of its nearly 300 employees while maintaining a small R&D team to continue innovation efforts.
The challenges at Cellforce are part of broader difficulties facing European battery manufacturers, as Asia maintains dominance in lithium-ion battery production due to superior scale and cost advantages. Additionally, worsening market conditions, including reduced EV demand, tariffs, and weak luxury EV sales in key regions like China, forced Porsche to lower its revenue forecasts for 2025.
Porsche CEO Oliver Blume confirmed that Porsche will no longer pursue independent battery cell production due to insufficient global volume and scale. Instead, the company is shifting its battery focus towards partnerships and advancing cell and system research, including investments in V4Smart, a division of Varta in which Porsche holds a controlling stake.
Despite the setback, Porsche remains committed to electrification, with 57% of its European deliveries in the first half of 2025 being electrified vehicles. The focus now is on leveraging strategic collaborations and technological innovation in battery development rather than costly vertical integration.
Porsche’s massive write-off and strategic retreat from Cellforce’s ambitious battery production plans underscores the immense technical and economic challenges of entering the battery manufacturing sector independently, highlighting the need for partnerships and innovation-driven strategies in the evolving electric vehicle landscape.
