Porsche AXES 500 Workers. The EV Bet Just Collapsed

Added: 2026-05-12

[00:00:00]Friends, this is Andrew Mitri and today we are going to talk about a name that until last year was the most recognizable luxury brand in continental Europe, Porsche. Porsche is cutting 500 jobs across three of its subsidiaries.

[00:00:13]The chief executive, Michael Lighter, said in plain language that the company must return to its core business. The translation in plain language is that the electric vehicle bet just collapsed and the bill is now landing on 500 families. Let us start with what actually happened. Porsche announced this week the closure of three internal projects connected to electric mobility, software development and battery integration. These were the projects that just 24 months ago the company described as its strategic future. The tan was the flagship product. Engineers were hired, factories were retoled, supply chains were redirected, and billions of euros were committed. Today the same management team is saying on the record that the projects no longer fit the company strategy 500 employees will be terminated or reassigned. Of those the majority are highly trained engineers and software developers in Stuttgart Visak and a small office in Leipik. These are not warehouse jobs.

[00:01:10]These are six figure salaries. These are the people who two years ago the chancellor's office held up as the future of European manufacturing. So what went wrong? Three things. First, electric vehicle demand across continental Europe collapsed faster than the industry's own most pessimistic scenarios predicted. Sales fell by double digits in 2025. Chinese competitors flooded the entry and mid-tier segments. The premium segment that Porsche was protecting did not grow as expected because high netw worth buyers also wanted variety and there are now 12 serious luxury electric options on the European market. Second, the energy story changed. Electricity prices in central Europe stayed high. Charging infrastructure remained patchy. Range anxiety did not disappear. Third, and most importantly, the regulatory expectation that combustion engines would be effectively banned by 2035 quietly softened. Brussels has not killed the timeline, but the political pressure has eased. The market read that signal. Buyers waited. Porsche's electric pipeline did not need to be as deep as the plan assumed. The 500 job cuts are small in absolute terms. The symbolic weight is enormous. Porsche has not done this in any of the previous European economic shocks. Not in 2008, not in 2012, not in the co years. The fact that they are doing it now in 2026 is a structural signal. A premium brand cutting deeply is a sign that the broader luxury car market is preparing for a long winter. Volkswagen is watching. BMW is watching. Mercedes is watching. Every one of them will face their own version of this conversation within 12 months. And the question facing the supervisory boards is the same. Do you keep investing in electric platforms that the consumer is not yet ready to buy at the price you need to charge? Or do you protect your combustion engine business and become a slowmoving incumbent in a market that everybody insists is dying? Now move to the second story. The European Central Bank is signaling another rate cut in June. Christine Lagard said, "Inflation has, in her phrasing, returned to target. The Eurozone economy is operating below potential. Bond markets responded immediately. The German 10-year yield fell 12 basis points. The Italian spread tightened. The euro weakened modestly against the dollar.

[00:03:26]For ordinary households in Central Europe, especially those who carry a variable rate mortgage, the next bill will be smaller. For depositors, the savings rate at your local bank will drop. For pension funds, the recalculation is annoying, but the broader signal is that the European economy is too weak to support current rates. And the ECB has admitted that openly for the first time this cycle.

[00:03:49]Third story, Lufansa has suspended 40 longrange aircraft from active service because Europe is running short of jet fuel. Yes, Europe is running short of fuel. Reserves are below seasonal averages. Refineries are operating, but distribution to airports has been disrupted by Middle East logistics and by tanker rrooting. 20 million summer passengers are now facing the very real prospect of cancellations, schedule reshuffles, or aircraft swaps. The European Commission has approved new guidelines so that passengers retain rights to refunds, airport assistance, and meal vouchers. The airlines are exempt only if they prove extraordinary circumstances, which they are now claiming for every cancellation. Lawyers are going to be busy. Travel agents are going to be busier. And if you are planning a flight to Greece, to Portugal, or to Spain in July, check your booking twice before you pack.

[00:04:39]Fourth story. Ireland was forced to hand over 500 million euros to the European Union after the Rossair port shutdown.

[00:04:46]The amount equals one year of Irish defense spending. Tawisak Mishial Martin agreed because the alternative was a Shenhen disruption Ireland could not absorb. Critics in Dublin are angry.

[00:04:57]Brussels insisted. This is a preview of what smaller member states are going to face over the next several years. The European Union is asking for faster decisions and bigger checks and the smaller economies do not have the option to say no. Fifth story, and this one matters for anyone with elderly relatives. Hospitals across central Europe are reporting that they cannot operate without foreign trained physicians. One clinic director told the press in plain language that without foreign doctors, a significant share of central European hospitals would simply stop functioning. In his clinic, one-third of doctors are foreign trained. The numbers are similar across many regional hospitals. The political conversation about migration has spent 2 years focusing on welfare and asylum. It has spent almost no time on the fact that the [clears throat] medical workforce in central Europe is held together by trained immigrants. Removing them is not theoretical. It would empty entire emergency wards. The hospital association is now lobbying for a fasttrack recognition pathway and the central government is to be polite slow to respond.

[00:06:02]Sixth story. The federal council blocked the €1,000 fuel compensation bonus that the lower house had already approved.

[00:06:09]The states refused to fund it. Almost twothirds of the tax revenue loss would fall on regional and municipal budgets.

[00:06:16]The chancellor's office announced the policy. The state said no. The Black Red Coalition is now publicly isolated on a measure that was supposed to be its olive branch to working drivers. Workers leave empty-handed. The political damage continues to compound. Seventh story.

[00:06:32]Briefly, the Bundustag passed a hard reform allowing courts to order electronic ankle monitors for domestic violence aggressors. 266,000 cases recorded last year. 187,000 victims female. If the aggressor approaches the protected residence, the system triggers an alarm and the woman can move to safety. It is the first measure on this file in five years.

[00:06:53]Victim support organizations are cautiously optimistic. Eighth story, the Bundes is building 24 new conscription assessment centers across central Europe. Baden Verenberg gets two in Offenberg and M. Since January, the ministry has sent close to 200,000 letters to 18 year olds. now follows physical, medical, psychological, and cognitive evaluation. This is not a draft yet. This is the infrastructure that makes a draft possible at short notice. The political class is being careful not to call it that. The 18year-olds and their parents are being less polite. Recruitment officers are reporting record cancellation rates of voluntary military service appointments.

[00:07:34]Whatever the government insists publicly, the population is reading the same signals and reaching the same conclusions.

[00:07:41]Ninth story. A senior Bundistag minister said this week that in her exact phrasing, "Nobody immigrates into our welfare system." The Labor Minister Burbal Bas was responding to an AFD member of Parliament. The clip went viral within hours. Critics, including some inside her own party, said the statement is at best naive and at worst dishonest, given that asylum seekers in central Europe are entitled to support payments roughly equivalent to a basic income for the first 18 months of residency. Defenders said the minister was making a technical distinction between welfare, migration, and asylum.

[00:08:17]Either way, the political damage is done. The SPD has now spent 10 days managing the fallout instead of governing. Where does this leave us? 500 Porsche engineers about to lose their jobs. The ECB cutting rates because the economy is too weak. 40 Lufanza planes parked. Ireland writing a half billion check. Hospitals dependent on foreign doctors. A fuel bonus killed by the states. And a small but important reform on domestic violence finally passing.

[00:08:45]This is not the picture of a confident continent. This is the picture of a continent improvising week by week under conditions that the institutions were not designed to handle. If this breakdown was useful, drop a like and a comment and tell me whether you would buy an electric vehicle today or whether you would wait. I read every comment.

[00:09:03]Subscribe so you do not miss the next briefing where we will look specifically at what the ECB rate cut means for your mortgage, your savings, and your rent. I am Andrew Meatri. See you tomorrow.