Porsche warned that expenses tied to expanding its product portfolio with more combustion engine and plug-in hybrid models will hurt its profitability this year.

The company will take an €800 million ($831 million) hit linked to revamping its lineup this year, lowering profit margins, Porsche said on Feb. 6. The margin will drop to the 10 percent to 12 percent range this year, it said.

Porsche is the latest automaker to pivot back towards combustion engine vehicles amid low demand for EVs in Europe and intense competition in China from local rivals.

The company said in November it will develop new combustion-engine derivatives across its model range to meet customer demand as sales of full-electric cars fall.

Challenges with making the jump to EVs has cost the company dearly in China, where its deliveries fell 28 percent in 2024.