Porsche will include a combustion engine option for “top” versions of the next-generation 718 Boxster and Cayman as part of a significant shift in the company’s electric strategy that also kills the planned large ‘K1’ electric SUV above the Cayenne.

The new ‘strategic realignment’ also confirms major overhauls for the Cayenne and Panamera combustion engine and plug-in hybrid models to keep them running “well into the 2030s’, CEO Oliver Blume said on a call to investors late on Friday 19 Sept.

Porsche will take a €1.8 billion hit on a decision to halt development of the SSP 61 ‘Sport’ version of the Volkswagen Group platform that was going to underpin the K1 large SUV as well as an electric replacements for the Panamera and the Taycan. The SSP Sport platform – derived from the platform underneath mainstream VWG models including the next Volkswagen Golf and Skoda Octavia – has now been postponed until “well into the 2030s”, Blume said

The K1 model – dubbed a 'D-SUV' by Porsche – will now be launched with combustion-engine and plug-in hybrid variants, Porsche said, without giving a precise date. The K1 was first announced in 2022, along with plans for the third-generation Porsche Panamera and second-generation Porsche Taycan.

“We have seen a clear drop in demand for exclusive battery-electric cars, and we are taking that into account,” Blume said.

Porsche has also been roiled by “dramatically decreasing” demand for luxury goods in China, Blume said. Also hitting profits was the US decision to increase tariffs on imported cars.

The company said the combination of circumstances will cut its predicted net profit margin to around 2% this year but predicted a return to growth in the ‘medium-term’ when it planned to grow margins back above 10% with the new products rolling out

“This flexibility gives us a strong position with a compelling mix of combustion engines, plug-in hybrids, and battery electric vehicles,” Blume said.

The CEO said the company was still committed to electrification. “They excite a specific and growing customer group,” Blume added.

Porsche is about to launch the new Cayenne Electric based on the Volkswagen Group’s 800V Premium Platform Electric (PPE) architecture, and already sells the Macan Electric.

Porsche had originally intended the electric Macan to replace the combustion-engine version, back when its plan was to push for 80% of its global sales to be electric by 2030.

However Porsche will now add an equivalent SUV model with both combustion engine and plug-in hybrid variants to sell alongside the Macan electric, the company said.

This new ‘M1’ SUV will be its first production car with drive biased towards the front wheels, after the company decided to based it on the third-generation Audi Q5 which sits on the VW Group’s Premium Platform Combustion (PPC) architecture.

In July Blume said the M1’s short, three-year development was “speeding up the process” of bringing it to market. A new Porsche typically takes five years from concept to road.

No more information was given the ‘top’ versions of the new 718 with the combustion engine, but it could mean the continuation of the hardore RS and GT4 RS models, with entry versions covered by the electric drivetrain.