Porsche To Build All-Electric Crossover In 2020

Porsche is moving forward with plans to electrify half its lineup while expanding its business beyond cars.

The company said today that it will begin building its second battery-powered vehicle, a Cross Turismo version of its forthcoming electric Taycan sports car, next year.

Porsche is investing $6.8 billion in a race to electrify half of its models by 2025. By 2030, “large parts of the world will be driven by a high demand in electric vehicles,” CEO Oliver Blume said today at the company’s annual meeting at its headquarters in Stuttgart, Germany.

The automaker plans to debut its first electric car in September: the 600-horsepower, four-door Taycan built to rival Tesla’s Model S. A battery-powered version of Porsche’s next-generation Macan compact crossover - the brand’s bestseller - will follow in the early part of the decade.

Meanwhile, Porsche is investing more than $900 million annually to develop mobile apps and digital services at its offices in technology hubs from Berlin to Tel Aviv to Silicon Valley. The automaker hopes the venture will comprise at least 10% of the company’s yearly revenue within three to five years.

Blume said the digital play will help Porsche remain a relevant lifestyle brand as cars become automated.

The connected services, operated through Porsche’s Communication Management infotainment system, “transport the experience of the Porsche brand into daily life,” he said. “Customers don’t need to own a Porsche to benefit from that.”

But Porsche says its push into electromobility is well-timed. The company said pre-orders for its first-ever electric car, the Taycan, have surpassed its 20,000-unit target, prompting Porsche to raise the annual production run. The automaker expects strong demand in the U.S., Norway, and China—Porsche’s largest market for the last four years.

Porsche says the Taycan can replenish 80% of its battery in about 15 minutes, besting competitors like the Tesla Model X and the Jaguar I-Pace SUV.

Porsche is also investing more than $600 million to expand its factory in Leipzig, where it will build the electric Macan. The company has also said it is considering hybridizing its next-generation 911 sports car.

Volkswagen Group, Porsche’s parent company and the world’s largest automaker by volume, is also investing heavily in electromobility, aiming to increase its electric lineup to nearly 70 models by 2028. The Group said on Tuesday that it plans to build 22 million electric cars over the next decade, well over the 15 million vehicles announced originally.

Electric vehicles currently comprise less than 1% of the new car market, according to IHS Markit. That figure is expected to jump to 6% by 2025, with several luxury automakers vying for share.

Polestar and Aston Martin each plan to launch their own electric sports cars later this year. BMW and Mercedes-Benz are building their first battery crossovers, while Tesla debuted its Model Y, a compact utility vehicle starting at $39,000, on Thursday.

Blume pointed to the market’s early enthusiasm for the forthcoming Audi e-Tron, a fully electric crossover from Porsche’s sister brand, as an example of the robust consumer appetite for electric vehicles.

However, not all performance automakers are rushing to go electric. McLaren Automotive said it may have an EV by the end of 2025 but that the battery’s weight imposes constraints on performance. “It would have to weigh twice as much and that does not equal a McLaren,” said Wayne Bruce, a company spokesman.

But Porsche will continue to diversify its business as younger customers show less interest in owning cars.

Several of Porsche’s new digital services focus on car sharing “for customers not yet ready to buy or lease a Porsche,” said Florian Rothfuss, director of digital business. Available in certain markets, Porsche Host and Porsche inFlow target younger customers with smaller budgets. “We are thinking more of younger consultants who need flexibility, not the 55-year-old CEO of a small company,” he said.

The infotainment services expose potential customers to Porsche vehicles while allowing the company to tap into new scalable businesses.

The Porsche 360+ digital assistant can assist with tasks such as managing personal appointments for roughly $112 per month for customers in Germany. “As a car company, we want to be more relevant in all areas of life, not just in getting from A to B,” said David Appold, project manager for Porsche 360+.

Through partnerships with websites including Open Table and Booking.com, Porsche’s Road Trip app guides drivers in the U.S., Germany, Austria, and Switzerland along the most stimulating route.

“It’s not the fastest way to get there,” said Tobias Kardach, who oversees the Road Trip app’s development, “but it’s the coolest way to get there.”

CarsJaclyn TropFortune