Porsche is Trying to Reinvent Itself in the Wake of Germany's Diesel-Emissions Scandal

I don't love electric cars, but if any company could change my mind, it's Porsche. (Tesla's don't do it for me at all.)

At Der Spiegel, "Electric Dreams: Porsche's Quest to Make Eco-Friendly Sports Cars":

Porsche is trying to reinvent itself in the wake of Germany's diesel-emissions scandal by turning itself into an environmentally friendly sports-car company. It's a billion-euro bet with enormous possibilities -- and enormous risk. https://t.co/nJDT1YyiIH

— SPIEGEL ONLINE English (@SPIEGEL_English) February 27, 2019

The Porsche of the future is still so secret that it's not allowed off the company's premises without an elaborate disguise. Two fake exhaust pipes stick out the rear, while a green pollution badge adorns the windshield. It's all an act to mislead competitors. Under the hood, there's neither a combustion engine nor an injection system. Instead, there are two electric motors and a heavy battery.

So far, it's just a test vehicle inconspicuously parked in front of Porsche's development center in Weissach, near Stuttgart. Porsche, however, is planning to unveil its first electric car at the end of 2019, and revamp its brand from the ground up.

Even for the engineers responsible for its roll-out, the new e-model is a culture shock. Ever since the first sports car hit the pavement 70 years ago, the name Porsche has stood for flashy combustion engines that roar when drivers hit the gas. Poor emission values and high fuel consumption were practically part of the brand's DNA. But the company's new model, the Taycan, is emissions-free -- and it's as quiet as a toy car.

For Porsche, this means it's no longer competing with the likes of Ferrari, Maserati, BMW or Mercedes. It's now in a direct contest with Tesla, the pioneering electric-car company from California. "Our goal is to be a technological trailblazer," says Porsche CEO Oliver Blume.

The End of an Era

Blume's plans are more ambitious than those of other German automobile manufacturers. By 2025, he wants at least half of the cars Porsche sells to be electric. Five years later, according to the company's own forecasts, Porsche will hardly have any vehicles on its assembly line with conventional combustion engines.

In late 2018, the company's supervisory board resolved to outfit Porsche's best-selling car with an electric motor within the next few years. The new version of the Macan, a compact off-road vehicle, will soon be fully electric. For the petrol-powered model, there will be only an update. After that, the era of the gas-guzzler will gradually come to an end.

It's a billion-euro bet with enormous possibilities -- and enormous risk. If Blume's plan works out, Porsche could become an ecologically oriented sports-car company, a role model for the entire German automobile industry. It would be proof that the industry has learned its lesson after the diesel scandal -- in which Porsche's parent-company, the Volkswagen Group, was found to have tricked emissions tests to make its vehicles seem more environmentally friendly than they really were -- and that it has not entirely slept through the transition to electric mobility.

The problem, however, is that Porsche's offensive comes at a time of great uncertainty. Nobody knows whether the company will be able to sell enough of its new e-cars. The brand has many loyal fans with a penchant for combustion engines. Even one of Porsche's brand ambassadors, Walter Röhrl, an ex-rally driver, has said e-mobility is the "wrong track."

Porsche's Dirty Past

Meanwhile, demand in the world's two largest automotive markets, the United States and China, is slowing, and disputes are further weighing on business. If U.S. President Donald Trump makes good on his threats to impose punitive import tariffs on foreign cars, Porsche would be more adversely affected than other German manufacturers. The sports-car maker sells nearly a quarter of its vehicles in America, yet has none of its production facilities there. The result would be a sharp drop in profits.

Then there's the fact that Porsche, in its quest toward a clean future, is regularly confronted with its dirty past.

At the end of January, the carmaker filed self-indictments with Germany's Federal Motor Transport Authority (KBA) and the U.S. environmental authorities. The reason: Porsche's iconic 911 sports car was emitting more CO2 than the company had previously disclosed. And it wasn't just older models: its 2016 and 2017 models were affected as well. The authorities are now investigating whether Porsche's failure to disclose was a mere oversight -- or possibly Germany's next exhaust scandal. The Public Prosecutor's Office in Stuttgart has initiated a so-called inspection process. Porsche has added that it's continuing its own internal investigations.

Porsche is also still under pressure for its role in Germany's "Dieselgate" scandal. Three company employees are under investigation on suspicion of fraud and false advertising. And the case against them is getting stronger, sources familiar with the investigations say. The defendants have yet to be granted access to the evidence against them, but it is conceivable that charges will be filed against them in 2019, the sources add.

To this day, Porsche rejects any blame for the German diesel scandal. The company has remained firm on its assertion that it didn't build the motors in question itself, but rather bought them from its sister brand Audi. Porsche has even considered pursuing financial compensation from Audi to the tune of 200 million euros ($227 million)...

Combustion engines are the best, and it'd be sad if this environmental push destroyed the brand.

But what the hell? It's the culture we have now. Better for American car-makers, I guess. (*Shrugs.*)

Still more.