Germany's Porsche is closing battery subsidiary Cellforce, reports say

German sports car giant Porsche plans to close the majority of operations at its subsidiary Cellforce, a factory for high-performance battery cells. 

According to the German newspaper Der Spiegel, the sports car manufacturer plans to lay off around 200 of its 286 employees at the factory in Kirchentellinsfurt, Germany.

The cuts suggest that, at best, a small research and development unit would remain at Cellforce’s site.

Porsche declined to comment on the reports, but Der Spiegel noted that a corresponding mass layoff was reported to the employment agency in the nearby city of Reutlingen on Wednesday. 

Porsche invested in Cellforce Group GmbH in 2021. At first, it was a joint venture between Porsche AG and battery cell manufacturer CustomCells. 

In an effort to establish Baden-Württemberg as a leading battery location, the state also offered €17 million in funding to Cellforce in 2022.

In 2023, Porsche then took over the business entirely with the promise of producing high-performance battery cells on a much larger scale than previously planned.

However, it was a short-lived ambition. In April this year, Porsche announced that it would not continue to operate the battery cell subsidiary independently. 

According to Der Spiegel, representatives from BMW visited the site at the beginning of August, and defence companies were also said to have been interested in the factory for developing batteries for military drones. Yet the latest media reports suggest that no new investors are on the horizon. 

The depreciation of Cellforce's production facilities is allegedly costing Porsche €295mn.

Meanwhile, around 200 employees face unemployment because, unlike its parent company Porsche, there is no employment guarantee and no works council at Cellforce.

All employees have been invited to a town hall meeting on 25 August, at the "Cellforce 1" building in Kirchentellinsfurt. Employees are also banned from taking holiday on that day, according to reports. Michael Steiner, Porsche's chief development officer and vice president, will address the staff.

The closure of the battery business highlights fundamental challenges to Porsche’s electric strategy, pursued by CEO Oliver Blume. Cellforce was intended to help increase the firm's EV sales and profits by allowing the manufacturer to draw upon its own high-performance cells.