Porsche Shares Set to Exit DAX As Headwinds Persist

Shares of Porsche AG (ETR: P911) are slated to be removed from Germany’s prestigious DAX index on September 22, 2025, a move that underscores the challenges the luxury automaker faces amidst a confluence of economic and strategic pressures. The stock has suffered a protracted decline, triggering its expulsion from the blue-chip index after just three years.

Price Targets

The announcement by STOXX Ltd confirmed that Porsche will be replaced by online listings company Scout24 as part of a regular index reshuffle. The market responded to the news with cautious sentiment, reflecting the stock's year-to-date decline of over 23% and a more than 30% drop over the past 12 months. The stock is now poised to transition to the mid-cap MDAX index, a move that could impact its visibility and trading volumes.

Porsche’s departure from the DAX reflects a confluence of factors that have weighed heavily on its financial performance. A key challenge has been the impact of U.S. tariffs on European autos, implemented under the previous administration. These tariffs have increased the cost of exporting vehicles to the U.S., a significant market for Porsche, thereby eroding profitability. The company has repeatedly lowered its outlook in recent months, citing the adverse effects of these tariffs.

Adding to Porsche's woes is a slowdown in demand from China, another crucial market. First-quarter sales in China plummeted by 42% in 2025, continuing a three-year downward trend. This decline is attributed to increased competition from domestic electric vehicle (EV) manufacturers and a shift in consumer preference towards more affordable, high-tech EVs. This has forced Porsche to re-evaluate its strategy in the region.

Furthermore, Porsche faces internal challenges, including investor concerns over CEO Oliver Blume’s dual role as head of both Porsche and its parent company, Volkswagen. At the annual shareholders meeting, investors voiced their dissatisfaction, urging Blume to relinquish one of the positions to mitigate potential conflicts of interest. Shareholders also criticized the influence of the Porsche and Piech families, who maintain control through Porsche SE, for allegedly hindering the board’s independence.

In response to these headwinds, Porsche has initiated several strategic shifts. These include a renewed focus on combustion engines and plug-in hybrids, alongside significant cost-cutting measures. The company plans to reduce approximately 1,900 jobs by 2029 and invest €800 million in developing new models. Despite these efforts, Porsche has lowered its medium-term return on sales target to 15-17%, down from the previous 17-19%, reflecting the challenging environment.

Analyst Summary: Bull and Bear Cases

Porsche's exit from the DAX index highlights the severe pressures it faces from tariffs, slowing demand in China, and internal governance issues. While the company is implementing strategic changes and cost-cutting measures to regain its footing, its path to recovery is challenging. The coming months will be critical, and the stock's performance will be a key indicator of whether its realignment efforts can successfully navigate the current headwinds and restore investor confidence.