Porsche's Rough Year Means It Needs To Find Ways To Save Money
Good morning! It's Friday, July 18, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.
In this morning's edition, Porsche has to find a way to save money, Jaguar-Land Rover delays key upcoming electric vehicles, the National Highway Traffic Safety Administration has to cut 25% of its staff, and U.S.-made vehicles are selling terribly in Canada.
1st Gear: Cost cutting hits Porsche
In an internal memo sent to employees, Porsche says it is bracing for further cost-cutting as the company struggles with declining sales in China and a tariff nightmare in the U.S. The German automaker will start working toward additional reductions in the second half of 2025, according to a memo from CEO Oliver Blume. Management is trying to follow through on its promise to find more savings after cutting around 1,900 jobs in Germany earlier this year.
Lower-than-expected demand for electric vehicles and weak-at-best sales in China are really doing a number on Porsche. It's a deeply competitive market, and for the time being, it seems buyers there prefer to go with homegrown options rather than imports. Things are also a mess in the U.S. It's Porsche's single-biggest market, and it relies solely on imports. You know what's hurting imported cars right now? That's right: it's President Trump and his ill-advised tariffs. From Bloomberg:
"Our business model, which has served us well for many decades, no longer works in its current form," Blume said in the memo.
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"All of this is hitting us hard — harder than many other car manufacturers," Blume said. Porsche earlier this month warned of a tough road ahead for sales this year, after a slowdown in the US and its persistent weakness in China.
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The 911 maker is following parent Volkswagen's lead in trying to whittle down its production costs in Germany, where labor and energy are expensive. Volkswagen clinched its own deal with unions late last year to slash production capacity and reduce headcount by 35,000 employees over the next five years.
The additional cuts, which still need to be worked out with German labor leaders, are meant to bolster Porsche's profitability in the coming years. It is targeting an operating margin of 15% to 17% in the medium term. That's up from 8.6% in the first quarter.
Just a few days ago, we told you about how Porsche was hiking prices across the board for the second time this year. It really seems the once-incredibly strong automaker is somewhat struggling in an automotive world that is changing rapidly.
2nd Gear: Don't expect the electric Range Rover soon
Jaguar-Land Rover is delaying the launches of some incredibly important electric vehicles in an effort to allow more time for testing. It is also holding onto a hope and a prayer that the demand for EVs picks up soon. The British automaker apparently told customers that deliveries of the highly anticipated Range Rover Electric will not start until next year. It also said Jaguar's new EV won't go into production until August of 2026. That's a trillion years from now. From Reuters:
Deliveries of the Range Rover Electric were originally supposed to begin late 2025.
The models, which are the first electric models to be manufactured directly by JLR, required extended testing, which partly led to the delay, the report added.
"Our plans and vehicle architectures are flexible so we can adapt to different market and client demands," the company said in a statement to Reuters, while maintaining that it would sell electric versions for all of its brands by 2030.
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Production of the Range Rover Velar's electric version, slated for production from April 2026, could also be delayed further, the report said.
Earlier this month, the twin companies posted a 10.7% drop in first-quarter sales. That's not exactly shocking when you consider the facts that JLR had to pause U.S. shipments over tariffs and Jaguar was in the process of sunsetting its older, gas-powered models.
Last month, JLR said it cut its target earnings margin before interest and taxes for the fiscal year 2025 to 5%-7%, down from 10%. It pointed to uncertainty in the global auto industry as a main reason.
Regardless of the reasons for these decisions, one thing is clear: Jaguar-Land Rover needs to get its act together... quickly. There are few automakers struggling more mightily right now.
3rd Gear: NHTSA sees big staffing cuts
The U.S. National Highway Traffic Safety Administration says it is cutting over 25% of its employees under financial incentive programs to depart the government offered by the Trump administration as a way to shrink the federal government and dismantle many of the incredibly important core functions it performs. This news came to light in data provided to Congress.
Under the Biden administration, NHTSA expanded by about 30%. From Reuters:
[NHTSA], part of the Transportation Department, is shrinking from 772 employees as of May 31 to 555 under the program. The Federal Highway Administration and Federal Transit Administration are also both losing more than 25% of their staff.
Representative Rick Larsen, top Democrat on the House Transportation and Infrastructure Committee, expressed concerns about the cuts, questioning how USDOT can "expedite project delivery and advance safety with a decimated workforce."
Overall, USDOT is losing just over 4,100 employees, dropping from nearly 57,000 to 52,862, with the Federal Aviation Administration shedding 2,137 workers and falling from about 46,250 to 44,208.
Transportation Secretary Sean Duffy told reporters on Thursday it was uncertain if the department would conduct layoffs.
"If we have bloat in certain areas we'll reduce force," Duffy said, adding the department would rehire back into some areas if needed. "We feel good where we're at right now, but we'll continue to assess where we're at with our staffing needs."
After Trump took office earlier this year, he launched a campaign to cut a massive number of the 2.3 million federal civilian workers who keep our government functioning. Much of this effort was led by Tesla CEO Elon Musk and his ill-advised Department of Government Efficiency. It remains to be seen what'll happen with that organization following Musk's public falling-out with the President and his departure from the administration.
4th Gear: Tariffs are hitting U.S.-made cars in Canada
Vehicles made in the U.S. gave up ground in Canada in the second quarter of 2025, thanks to a tariff war started by President Trump. It's always a good move to piss off your next-door neighbor and long-time partner, isn't it? U.S. imports account for 39% of vehicle sales across Canada between April and June. That's down from 41% in the first quarter — before tariffs really got going, according to DesRosiers Automotive Consultants. From Automotive News:
Modest so far, the decline is likely to accelerate as dealers clear pre-tariff inventory from their lots and automakers evaluate the economics of importing American-assembled models that face Ottawa's retaliatory tariffs of 25 per cent, said Andrew King, DesRosiers' managing partner.
Modest so far, the decline is likely to accelerate as dealers clear pre-tariff inventory from their lots and automakers evaluate the economics of importing American-assembled models that face Ottawa's retaliatory tariffs of 25 per cent, said Andrew King, DesRosiers' managing partner.
Affected nameplates are feeling "significant pain," King said, and automakers such as Mazda with its CX-50 and Nissan with its Pathfinder, Murano and Frontier have already opted to wait out the tariffs by temporarily halting production of U.S.-made vehicles destined for Canada.
"The only other option is to put up the price, and obviously putting up the price 25 per cent is not practical for most segments, most models," said King.
Ottawa imposed counter tariffs on U.S.-made vehicles on April 9. It came less than a week after Trump re-enacted global tariffs on vehicle imports, including those from China.
Some are still holding out hope that Canada and the U.S. can hammer out some sort of agreement in the third quarter of this year. However, if that doesn't happen, more automakers could end up dropping American-made cars from their Canadian lineups. Are ya'll tired of winning yet?
Reverse: Ted, what the hell were you doing?
Something hinky happened here, Ted. If you want to learn more about what happened here, head over to History.com.
On the radio: The 1975 - I'm In Love With You
Friday, baby — I'm in love with you. I'll see you cool cats next week.
