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Porsche North America CEO on electrification

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Porsche North America CEO Kjell Gruner on Porsche's bet on electrification, and the automaker's prospects for 2021.

Video Transcript

[MUSIC PLAYING]

ADAM SHAPIRO: Let's bring in Pras Subramanian to talk about the fact that sometimes when you get a new position at work, you celebrate by either buying a Tesla or a Porsche if you have that kind of income. Which would you buy?

PRAS SUBRAMANIAN: You know, Adam, I'm a big Porsche guy. I think you know that about me. But you know, that being said, I did speak with Porsche's North America, CEO, Kjell Gruner. He's new on job and you might be surprised to know that Porsche is betting big on EVs too. Let's take a listen.

KJELL GRUNER: We are great believers in electrification. I mean, we started quite a while ago when we launched the 918 Spider-- that's 11 years ago now-- with a plug-in hybrid. We added full hybrids in Panamera and the Cayenne and the plug-in hybrids there. And if you look at our Turbo S plug-in hybrids, we have for instance, in the Panamera. I mean, those are really, really very emotional cars and the Taycan obviously was then really the next big step.

We are very pleased with the customer reactions. At the end of the day, they tell us if they love the vehicle or not. We put everything into it. Started with a clean sheet of paper, developed from scratch a new platform for it, because we believe if you do something, you better do it right. And it was our target to have a Porsche battery electric vehicle, we call it soul electrified, so that you can feel the soul of Porsche in an electric vehicle.

We added the rear wheel drive Taycan. It's a bit like the 911, you know, you have the engine in the rear, and rear wheel drive, so a bit kind of a puristic derivative of the Taycan. I mean, we have to wait for people to drive it in the US. I had the chance to drive it, so let's see what the reaction is but we are positive. Absolutely.

PRAS SUBRAMANIAN: I want to talk more broadly about the EV market, right? So we saw Audi, kind of a sister brand to you guys, put out their electric e-tron GT this week. Are you glad to see more competitors coming into the space? And does that kind of help you guys expand the market and also take on the Tesla's of the world?

KJELL GRUNER: That is a very good question. And you mentioned competition. We are-- from the spirit, Porsche is a very competitive brand. I mean, we were born in motor sports and there it's all about competition. I mean, if you're driving alone, what does it mean to win, right? So we're very competitive as a brand.

We also think if it gives customers a choice in the market that's great. So yes, we love to see Audi coming with a very attractive product. The good thing is this is very much an Audi and it goes after their target group. The Taycan is really a Porsche, so within our brand. So we're happy for them. They have an attractive product.

Within the Volkswagen group obviously, we have some component sharing. So that helps us on the cost position, helps us also to be more competitive and enable us to have a better offer for the customers out there. So we believe everybody here really wins if we do things like that.

PRAS SUBRAMANIAN: You know, a lot of also heat coming from the EV space with regard to electric SUVs and also pickups, Rivian, those types of players among them. I know Porshe's talked about the Macan becoming an EV type vehicle. Is that still in the plans?

KJELL GRUNER: Yes. I mean, if you look at our sales figures, Macan and Cayenne are very important for a volume perspective. So we have large volumes in there, that's why we also take our time and develop really the successor of the Macan very, very intensively with all the know how that we have into that new product. So it will be a while until we are going to launch the Macan successor. That will be a battery electric vehicle but it's still a while out there. We just-- you know, it's not so long ago that we launched the Taycan and we are building step by step the Taycan model line until the Taycan family is kind of complete. So and when we have that complete then we will do the next step.

PRAS SUBRAMANIAN: So you mentioned the future Macan will potentially be a battery electric vehicle and among other gas powered variants, but talk about 2021 in general. 2020 somehow was your second best year ever here. You know, given the pandemic that we're in, what did you guys learn and what do you think is applicable for next year or going forward?

KJELL GRUNER: Oh, good question. We learned of so much in 2020. The whole topic of digitalization, I mean, us having this interview this way here. So digital, we all knew digital is important but that got really another boost here. So we have been investing into digital since a long time. But certainly there is another speed into that. Online car sales. I mean our dealers, they've been selling online. Last year it was 10% of the dealerships. We are up to 70% now and we will see that rate definitely increasing.

Other trends like going from ownership in some target groups, towards experience versus owning. I think that is a trend that is continuing. Not in all target groups but we want to expand the Porsche tent and younger, target groups, more digital target groups, are really, really important for us.

So we are expanding Porsche Drive. We are active in five cities now and step by step increase that. So for people that say, I want to have multi vehicle subscription so I can have an SUV and a roadster, something different in summer versus winter time or I just want to fulfill my dream about a Porsche for three months. And that's great, I mean, if we can give that flexibility to people so to fit to their lifestyle, we think that that's super important. And also there, the pandemic, it was good for the customers, they could step out and now they have this good feeling of flexibility on their side. It gave us a boost in that business.

And last, not least, I mean, we again, learned how important the team is. That you have a dedicated team that has passion for what it's doing. And I mean, the entire team, the dealerships, [INAUDIBLE], us working as a brand in the market, being agile, flexible. We're a sports car brand, right? So to be fast and adapt fast is a big target for us. And I believe that really helped us tremendously during that crisis.

PRAS SUBRAMANIAN: Yeah, Adam, so Porsche moving fast here with their Taycan. They want to get ahead of the curve, take Tesla on. 2020 was a good year, but 2021 could be even better.

ADAM SHAPIRO: I would like to have either of them. I'd take one used. Pras, thank you very much.