Porsche’s ambitious electric mobility project has hit a major setback. Its battery subsidiary Cellforce is reportedly facing closure, putting around 200 jobs at risk. The company, established to make Porsche a leader in high-performance battery technology, is now grappling with financial challenges and strategic shifts that threaten its future.
Cellforce: From Ambition to Uncertainty
Launched in 2021 with great fanfare, Cellforce was meant to pioneer high-performance battery cells for Porsche’s next generation of electric vehicles. Backed by government funding of nearly €60 million, the subsidiary was seen as a cornerstone of Porsche’s electrification roadmap. The company set up operations in Kirchentellinsfurt, Baden-Württemberg, with plans to expand into a large-scale production site in Tübingen.
However, these plans quickly ran into hurdles. Regulatory issues delayed expansion, and the momentum behind Europe’s push for battery sovereignty weakened. By April 2024, Porsche had already signaled that it would not continue operating Cellforce independently and began searching for investors.
Mass Layoffs Loom as Operations Wind Down
According to reports, Porsche has now filed a mass dismissal notice with the labor agency in Reutlingen. Out of around 280 employees at Cellforce, only a small research and development unit of about 80 staff is expected to remain. For the remaining workforce, the risk of unemployment looms large. Unlike Porsche, Cellforce does not offer job security guarantees, intensifying concerns among employees.
For the region of Baden-Württemberg, known for its strong automotive and industrial base, the potential loss of 200 highly skilled jobs is a blow.
Porsche’s Struggles in the EV Race
The troubles at Cellforce highlight Porsche’s broader struggle to maintain momentum in the electric vehicle (EV) sector. Despite early ambitions, Porsche has slowed its transition to electrification and recently announced renewed investments in internal combustion engines.
The setback comes at a time when Porsche’s financial performance is under pressure. In the second quarter of 2024, the automaker reported a profit of just €154 million, down nearly 91 percent compared to the same period in 2023. The decline was attributed to slowing EV demand and high development costs.
The closure of Cellforce could cost Porsche around €295 million in write-offs related to production assets, marking a significant financial hit for the Volkswagen-owned luxury brand.
Investor Interest but No Rescue
In recent months, Porsche explored possible partnerships to salvage Cellforce. Representatives from BMW reportedly visited the facility in early August, while defense companies also expressed interest in the technology for military drone applications. Despite these discussions, no deal has materialized, leaving Cellforce with limited options.
The company’s fate now depends on whether a smaller research-focused unit can continue operations and whether external investors step in to repurpose parts of the technology.
What This Means for Porsche and the EV Industry
The downfall of Cellforce underscores the challenges facing Europe’s battery industry. While automakers are under pressure to innovate and reduce dependence on Asian suppliers, building competitive large-scale production facilities has proven difficult.
For Porsche, the setback not only damages its EV strategy but also raises questions about its long-term positioning in an increasingly electrified market. CEO Oliver Blume, who also heads Volkswagen Group, must now navigate a difficult balance between managing financial losses and maintaining Porsche’s image as an innovator in luxury performance cars.
Employees Await Final Decision
A general assembly of employees has been scheduled, where Porsche’s development chief Michael Steiner will address the workforce. For many at Cellforce, the meeting may confirm fears of imminent layoffs. Unless an investor emerges with a rescue plan, the project once touted as a symbol of German innovation may come to an abrupt end.
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