Seven decades after the 356 Roadster, Porsche is about to be founded for the second time with the Taycan. Porsche CEO Oliver Blume reports on the beginning of the new Porsche e-performance era.
In 1948, Ferry Porsche invented a car. Its name: the 356 Roadster, or “Number 1” for short. It was his dream of the perfect sports car that he couldn’t find anywhere else – the start of the Porsche era.
Seven decades later, Porsche is about to launch its second incarnation: with the Taycan, the Porsche e-performance era begins.
The first purely batterypowered sports car made in Zuffenhausen marks a turning point: the transformation from a pure sports car manufacturer into the most successful provider of exclusive and sporty mobility. The transition from a hardware producer to an integrated hardware, software and service enterprise. We are continuing our business model into the digital era. But our aspirations remain those of Ferry Porsche: the dream of the perfect sports car.
At Porsche, innovation and continuity have always gone hand in hand. The new factor is the pace at which the classical business models are continuing to develop. We will need to be increasingly quick to meet customers’ desires for more flexible, safer, more individual and more sustainable mobility. Despite this new dynamic, traditional core competencies remain indispensable. Porsche is changing, but our identity remains the same.
Our product strategy gives substance to this approach. It is built on four pillars – four dimen sions, orientated to the different desires of our customers: our basis consists of the familiar models with sensible derivatives. In the second dimension, we celebrate our racing sport tradition. With purist, uncompromising GT and RS driving machines, we cultivate our image and refine our brand. In the “lifestyle” dimension, we combine modern vehicles with iconographic elements of earlier generations. Our plugin hybrids and pure emobiles form the fourth pillar. A supporting pillar. Our future.
Where drive types are concerned, we are ringing in the electric era with a triad of highly emotional petrol engines, powerful plugin hybrids and, from 2019, purely electric drives. We will therefore be serving the wishes of our customers just as much as the needs of the markets – which are by and large moving quickly in the direction of electromobility.
Porsche has set the course. In Europe in 2018, more than half of all new Panameras came onto the roads as hybrids. In 2019, we will celebrate the première of the Taycan. And with the Cross Turismo, the first derivative is already on its way. Electromobility has convinced us with outstanding performance values and optimum efficiency. We welcome it.
Last year, we also said goodbye to another technology: Porsche has never developed or built diesel engines itself. This technology has always played a relatively minor role for us. We have therefore decided to do without it in future. With this decision, we are refining the core of our brand: that of a sports car brand. Consistently geared towards the mobility of the future. Porsche and electromobility: they go together perfectly. And, as ever, when Porsche starts a race, it aims to win. In 2019, therefore, we will be competing in Formula E for the first time, in addition to our commitment in the GT class and in customer sport. Because Porsche’s heart is in motor sport. This is our soul, with the race track as a laboratory for innovations.
In this area, the electric era already began years ago: in 2013, with its record drive on the Nürburgring, the 918 Spyder showed us how superior a hybrid can be in the super sports car segment. Then, with the 919 Hybrid, we revolutionised endurance racing and won the 24 Hours of Le Mans, the toughest race in the world, three times in succession. The Evo version of the 919 even undercut the 35-year-old lap record on the Nordschleife of the Nürburgring – by almost a minute.
Experience that we gather on the race track is successively fed into standard production. In 2014, Porsche was the first manufacturer in the premium segment with hybrid systems in three model ranges. Since then, we have continuously optimised our performance and electric range. The most recent ex ample is the Panamera Turbo S E-Hybrid, which not only enables emissionfree driving in inner cities; the electric components of its hybrid drive also support the sporty driving dynamics, if necessary. The driving experience typical of Porsche.
Just like the Porsche 919 Hybrid, the Taycan also relies on 800-volt technology. This voltage level lays the foundations for the entire electric drivetrain: from the battery, electronics layout and electric motors to the performance of the charging process.
Porsche has developed the corresponding components in pioneering work which touched the limits of what is technically feasible. The liquidcooled lithiumion battery also has its origins in the high competitive pressure of motor sport. In four minutes, it charges sufficient energy for a range of 100 kilometres. This makes the Taycan suitable for everyday driving and for touring.
The prerequisite for this are high-performance charging systems. At home, the Taycan fuels up with the Porsche Mobile Charger Connect – overnight and fast, up to 22 kW. We will also offer inductive charging. Through the joint venture IONITY, we are also building fast charging stations throughout Europe, together with Audi, BMW, Daimler and Ford. By the end of 2019, 400 locations will already be on the network. In America, the Volkswagen Group initiative “Electrify America” will offer similar charging options. Furthermore, Porsche is planning more than 2,000 AC charging stations at very busy stopping points worldwide, to be completed by the market launch of the Taycan.
Starting a new era requires a large investment from us. Six billion euros are flowing into electromobility alone, of which one billion will benefit our headquarters in Zuffenhausen. There, we have built a factory for the Taycan and, with it, around 1,500 new jobs. All the Zuffenhausen colleagues are supporting this project by waiving part of their pay rises. This future package is unique in the industry’s history.
The demand for the Taycan is already massive. We are optimistic that it will also enable us to meet the increasingly strict EU climate targets for cars. After all, Porsche is not a volume manufacturer. Zero emissions immediately make Porsche an impact in a model line such as the Taycan. As with the Cayenne, other plug-in hybrids will follow. The new 911, the eighth generation, has also already been developed with a hybrid capability. In 2025, over half of all newly delivered Porsche models could already have an electric drive.
Porsche stands for acceleration, and this also applies to transformation. In this area, we benefit from our strength: above all, the transition to the new exhaust gas measuring method WLTP and the associated bottlenecks, as well as our abandonment of diesel, have demanded much of us in 2018. This makes the balance that we achieved this year all the more remarkable: despite all the adversities, 2018 was a record year once again. In the 2018 financial year, Porsche AG delivered a total of 256,255 vehicles (plus four %) and increased revenue by ten % to 25.8 billion euros. The operative result increased by four % to 4.3 billion euros (2017: 4.1 billion euros). Despite very high levels of investment in electric mobility and future technologies, the operating return on sales of 16.6 per cent exceeds the strategic target of 15 per cent.
The refurbishment of our model range, considerable investments in the development and infrastructure of electromobility, the qualification of the workforce for new technologies – all this has its price. In addition, there are the material costs for an electric vehicle, which are between 6,000 and 10,000 euros higher than for a combustion engine. This initially reduces the profit per car. Despite this, we will continue to stick to our strategic target of an operative sales return of at least 15 percent. This is the only way to secure jobs and make investment in new technologies possible.
In 2018, we therefore set a results programme. On the one hand, we want to place even more emphasis on digital business areas, and therefore new sources of revenue. On the other hand, we are reviewing our structures with a view to where we can streamline our processes even more or become even more efficient, what we can do without and which synergy potential we can use to better effect. By 2025, this will enable a total of six billion additional euros to be generated as a result. If our measures are effective, two billion euros will then be generated each year from 2025. Our targets are ambitious. We must and will make even more effort than ever to remain on course in the coming years. We have what we need to do this: stamina, expertise, passion.
And efficiency. Made visible in the form of our new Taycan production and assembly, a factory within the factory at Zuffenhausen. We are implementing driverless transport systems in continuous flow for the first time there, with the socalled Flexi line. We are therefore combining the advantages of the classical flow principle with the flexibility of an adaptable assembly.
Under the motto “smart, green, lean”, the Taycan will be created CO2-neutrally. Our target is what we call the Zero Impact Factory – a factory with no environmental pollution.
Two years ago, we completely converted our production sites in Germany to natural power. Since its foundation 18 years ago, the Porsche factory in Leipzig has been one of the most modern and sustainable automobile factories in the world. Energy efficiency measures have enabled a total of 9.3 gigawatt hours of electricity to be saved there since 2015. This corresponds to the average annual consumption of approximately 1,900 fourperson households. The rail transport of the finished vehicles is also powered by green electricity. This saves 6,200 tons of CO2 per year. Photovoltaic systems in buildings provide solar power for the body assembly lines of the Macan and Panamera.
With Porsche Impact, we are also giving our customers the opportunity to reduce their carbon footprint for the first time. Depending on the mileage, model and vehicle features, Porsche Impact calculates the emissions of the vehicle. The customer can then compensate them on a voluntary basis by supporting suitable climate protection projects.
Sustainability, digitalisation, connectivity, artificial intelligence: Porsche is well on track. Our objective is to become the leading provider of mobility solutions in the premium automobile segment. The art lies in interpreting the technical possibilities of digitalisation in Porsche’s terms. Not as an end in themselves.
We are therefore working on our own solutions which will improve functions for customers or facilitate our processes. In production, as well as in the vehicle. The best example is the wet mode, a worldwide innovation in the new 911. It gives a warning when it is beginning to rain and offers safe driving assistance. A night vision function with a thermal imaging camera helps you through the night. We are also the first automobile company ever to equip a vehicle, the Panamera, with the digital security technology Blockchain. The decentral storage technology is well known from the world of finance. Together with the Berlinbased startup XAIN, we are bringing it into the vehicle.
Cooperations are part of our strategy. We have there fore increased our IT budget from 150 million euros to 450 million. With young startups, we are securing our access to exciting new technologies. For this purpose, Porsche Digital GmbH has opened a new Digital Experience Foundry in Ludwigsburg. Here, digital products and services connected with the vehicle are developed and modern working methods are implemented.
In 2018, we were already able to present our first results: Porsche 360+ navigates customers through their everyday lives. A personal lifestyle assistant orders presents, plans trips and buys tickets. Even for soldout concerts, around the clock. With offers like these, we are opening up for the first time to customers who do not own their own Porsche. In the past year, we have already had very good experiences with the subscription model Porsche Passport: for a monthly fee, the customer can choose from 22 Porsche vehicles and change to other models as they wish. This is currently only available in Atlanta in the USA, but will soon also be offered in cities in Europe and Asia.
With the Taycan, we are going even one step further. For the first time, we will offer updates “on demand” and “over the air”, either long after the purchase of a car, or just for a certain time. Because the path to the autonomous car goes through numerous assistance systems – for example, the congestion pilot or instruments which enable the car to search for a parking space and park itself.
A Porsche will still have a steering wheel in the future. People will always want to drive a Porsche themselves and be able to, because driving pleasure is part of the essence of the brand. In automated driving, we are therefore supporting solutions which fit the needs of our customers, for example on the race track. The autopilot knows the ideal course and shows how bends can be perfectly braked into and where it is best to accelerate.
Digital transformation ensures social progress. It makes life simpler, more pleasant, more sustainable. But not everyone will still be able to do the job they are doing today in ten years’ time. New digital business models require new employees with a different mentality and approach. We are preparing our team specifically for this. We want to qualify them right across the spectrum between the cornerstones of tradition and innovation so that everyone in the company can benefit and nobody loses out.
32,325 people were working at Porsche at the end of 2018 – more than ever before. This corresponds to an increase of 8.5 percent in comparison with the previous year. Porsche’s attractiveness as an employer is unabated. Around 150,000 applications per year and regular top placements in employer rankings prove this. And although our workforce has more than doubled since 2011, we at Porsche place particular value on the feeling of togetherness and cooperative interaction with each other. Since these values are not mere lip service but are also actively practised, we have started a new Employer Branding campaign. With it, we present ourselves, particularly to students and career starters, as an authentic, human employer: authentic and downtoearth. The basis for this is the culture guideline, refined in 2017 by more than 500 employees from all areas and with the involvement of the workers’ representatives, with the central values of “pioneering spirit, dedication, sportiness and family” – our selfimage.
We remain true to these values. They are our foundation, which was laid by Ferry Porsche with the “Number 1”. In this consciousness and with the experience of over 70 years of sports car history, Porsche is facing the transition – even though much depends on external developments: the regulatory, the economic and the political.
We want to, and we will, continue to set standards. To enjoy competitive advantages and to fulfil our responsibility. We generate revenue. Revenue creates innovations. Innovations create investment and excellence. They ensure prosperity, social security, work and the education of young people.
The future begins today. Porsche is embracing it.
Panamera Turbo S E-Hybrid: Fuel consumption combined 3.3 l/100 km; CO2 emissions 74 g/km; electricity consumption (combined) 16.0 kWh/100 km