The daunting task faced by new leaders at European automakers Porsche and Ford Europe

Baumbick’s challenge goes beyond slowing Ford’s decades-long decline in Europe. He also must repair the company’s botched electrification strategy, which was intended to position Ford as a regional auto leader, and develop a model range better aligned with the needs of European customers and dealers.

Like other auto industry leaders, Ford had been primed for the shift to electrification. Ford had outlined an ambitious plan for Europe that included new electric vehicle (EV) models and a gradual phase-out of its ICE offerings. In February 2021, the company had announced that 100% of its European passenger vehicles would offer zero-emissions capable powertrains by 2026 and be fully electric by 2030, implying the end of ICE cars in Europe after that date. The plan called for two new SUVs built with Volkswagen’s (VW’s) MEB electric architecture through their joint venture, along with a battery-electric version of the B-SUV Puma, leaving the Puma and Kuga the only ICE models until the eventual phase-out.  

The new models, however, were nearly identical to the Explorer and the Capri SUV-D. Explorer production was also delayed for nearly a year due to a battery issue, and the Capri name was applied to a vehicle with no connection to the sporty coupes that had made it famous among European automakers in the 1970s and 1980s. Market response to both models has been underwhelming, highlighting the difficult landscape facing auto leaders at Ford Europe.  

As a result of Ford’s faltering EV strategy, its European operations are facing reduced production and disappointing demand. At the beginning of 2026, the Cologne plant will move to a single-shift operation, cutting 1,000 jobs. S&P Global Mobility projects that combined Explorer and Capri sales will reach just over 60,000 units in 2025.

While the Ford CEO grapples with a steep sales decline and a troubled electrification strategy, another automotive industry leader—the incoming Porsche CEO, Michael Leiters—faces a different set of challenges among European automakers—all centered on profitability. While Porsche’s sales decline is not as dramatic as Ford Europe’s, it remains a concern, as does the company’s sharp drop-off in financial performance in recent years. This drop-off will be Leiters’ primary focus when he takes over on Jan. 1.

Porsche was once the shining star among European automakers, with operating margins consistently in the mid- to high teens during the last decade. Although Porsche recorded a 14.1% operating margin in 2024, it had initially posted a target of just 5 to 7% for 2025. But weak performance this year—including a nearly €1 billion third-quarter loss—forced the company to slash the 2025 target to a maximum of 2%. A major squeeze on its operations in China and a slowdown in the global premium BEV market have prompted a broad strategic review, leading Porsche—like Ford—to scale back and delay parts of the electrification strategy it had announced in September.  

This realignment means more money for ICE vehicles, specifically Porsche’s brand-defining models. Its new SUV line-up, which will sit above the Cayenne, will launch with ICE and PHEV options, rather than as a BEV-only model as originally planned. Porsche will extend the lifecycles of its current ICE models and introduce successor models, while the Taycan and Macan Electric BEV models will remain in production with ongoing upgrades until a new BEV platform emerges in the next decade with support from VW.

Porsche CEO Leiters will have limited room to alter this strategy, making further aggressive cost-cutting likely on top of the already-announced 1,900 job losses across its German operations. He must also address Porsche’s weakened share price, which has fallen from a March 2023 peak of €120 to roughly €45 today.