Porsche shares dropped more than 7% on Monday after the carmaker cut its profit outlook and postponed the rollout of a new electric vehicle line, sending Volkswagen stock, its largest shareholder, down by a similar margin. The company now expects operating profits to fall by €1.8 billion this year, forecasting a slim return on sales of up to 2%, compared with earlier guidance of 5–7%. This marks the fourth downgrade in 2025, underlining the strain of its slower EV transition.The firm said its new SUV range, originally planned as all-electric, will launch as combustion and hybrid models instead, while a dedicated EV software platform has been pushed back to the 2030s. Existing combustion models will also stay in production longer. Volkswagen, which owns just over 75% of Porsche shares, warned separately of a €5.1 billion drag on group profits linked to Porsche’s weaker performance.Europe’s automakers face waning demand for EVs, squeezed between slowing Chinese consumption and rising competition from state-backed Chinese manufacturers offering cheaper models. The uncertainty around the EU’s 2035 combustion ban, alongside reduced subsidies, has complicated investment decisions.What Does This Mean for Me?Porsche’s stock has already shed over 30% this year and will exit Germany’s DAX index at the end of September. To contain losses, the company plans to eliminate nearly 4,000 jobs by 2029, with a mix of natural attrition, hiring freezes, and lapses in temporary contracts. Investors remain wary as the brand struggles to balance short-term profitability with the costly pivot toward electrification.