Tariff anxiety . . .

[someTimesJoe]

I’ll see what my SA said is true. Ones that have already left port in Germany should be good to go.
Mine has been in Benicia since 3/31 and waiting to get to the dealer. Probably backed up at the local port.

Sponsored

 

[Rterziyan]

Where are you guys seeing a delay? My car from Daisy Leader just says My Porsche is at Local Entry Point being Readied on 4/1. En route to porsche center says "not scheduled"

 

[USMA81]

Asking Grok AI:
“Tariffs are typically applied to goods at the destination port, when they enter the importing country. This is because tariffs are taxes imposed by a government on imported goods, and they are collected by the customs authority of the importing country as the goods cross its borders. The point of embarkation (where the goods are shipped from) is generally not where tariffs are applied, as the exporting country doesn’t impose tariffs on its own exports—those are handled by the importing nation.”

Also, just FYI, as of this morning the Porsche configurator doesn’t show a change in base price, at least not yet, but it certainly will soon, I think.

 

[PrudentOcean]

That should really start with any vehicle that has left the port in Germany.

That’s not how things work. Tariffs are imposed at the US border by customs, until the vehicles get here they are not subject to duties and tariffs.

 

[someTimesJoe]

Where are you guys seeing a delay? My car from Daisy Leader just says My Porsche is at Local Entry Point being Readied on 4/1. En route to porsche center says "not scheduled"

Wouldn’t say it’s delayed just yet. My date just updated to April 16-May 10 to be enroute to Porsche center and delivery. My last Taycan, it took a week from the Benicia port to the Porsche center and was ahead of what the app stated at the time. I’m thinking it may be longer this time with the craziness.

 

[fubar.droid]

The delay is self imposed by VAG to figure out the tariff situation. All the cars at port right now is going to reach the dealers, that's not the issue.. the issue is that all the cars that haven't cleared customs yet will get tariffed and Porsche has no choice but to pay it and then pass some / all of it along to the dealer, who then would pass some of that along to the buyer.

I have no plans to pay extra beyond the original agreement and I have a clause to cancel the purchase order if price goes up, which it will. Just need to wait for the mess to sort itself out and the dealer to get invoiced before the SA will reach out to me at which point I will cancel my order. For me it's just a car that I don't get but I feel bad for everyone whose livelihood is on the line here, like the SAs who will likely get a bulk of their orders cancelled and the dealers will be stuck with a ton of unsold inventory.

At this point I'm planning to just wait for the Cayenne EV, which is what I actually wanted, in a few years. Hopefully the US hasn't imploded by then.

 

[Awaz]

Stock Market Today: Stocks take $2 trillion 'Tariff Tantrum' plunge!

 

[Wivenhoe]

Awaz - I was trying to escape from that news !!

 

[dgkhn]

Let's think about this for a minute… Why is VAG apparently keeping cars in port (I assume pre-customs) for the next couple of weeks? To figure things out? What is there to figure out, that they haven't already been thinking about? My suspicion is they're waiting to see whether the tariffs in fact stay in place. It would be foolish to bring the cars through customs, and pay the tariffs if they go away quickly, so I'm thinking the gamble is let's wait to see if the administration backs down or if Germany make some kind of deal that reduces or eliminates the tariffs for now.

If I were a betting man (which I am most definitely, NOT), I would bet that those 25% tariffs don't last very long for a bunch of reasons. VAG at least apparently wants to wait and see.

 

[PrudentOcean]

I agree 100%.

One difference though is that VWs are mass-market cars that aren’t ordered to spec, and they have a narrow profit margin. VW can’t afford to screw up on the timing of the import if they want to make money on the car.

Porsche on the other hand has a 40% profit margin (on average) to play with and could afford to import now without losing their shirt.

 

[dgkhn]

Porsche on the other hand has a 40% profit margin (on average) to play with and could afford to import now without losing their shirt.

Let's play a little game. I am not sure what 40% profit margin really means, but let's say that's the margin between manufacturing cost and retail selling price (i.e., contribution margin), including dealer profit (which is cheating, I guess). (So that 40% is split among PAG, PCNA, and tne dealers). But let's just say; this is back of the envelope figuring. Porsche sold a little over 76,000 cars in the US in 2024 (https://newsroom.porsche.com/en_US/...rts-US-retail-sales-record-in-2024-38352.html) so lets round that to 1500 cars/week. So if Porsche holds 2 weeks worth of cars at the pier to see if the tariff goes away, that's 3000 cars. Let's just say the average retail price of a Porsche is $100,000. So that's $40,000 contribution margin per car.

Let's say that PAG brings those cars keeping half the margin, so import price is $80,000, and 25% tariff is $20,000. $20,000 x 3000 cars is $60 million. Now you're the team deciding what to do next, and you are looking at a sudden loss of profit of $30 million per week (which would be $1.5 billion in a full year!) What would you do next?

 

[ze_shark]

If we work with this 40% gross margin assumption, and a 100k$ dealer transfer price vehicle to simplify:

Landed COGS: 60k$ before tariffs
OPEX: 24k$ (fully allocated, again, to simplify)
Operating margin: 16k$ (16% currently)

Landed COGS: 75k$ after tariffs
Gross margin: 100-75=25k$
OPEX: 24k$ (same)
Operating margin: 1k$

So i am not sure in which universe Porsche can be expected to absorb this ?

 

[dgkhn]

If we work with this 40% gross margin assumption, and a 100k$ dealer transfer price vehicle to simplify:

Landed COGS: 60k$ before tariffs
OPEX: 24k$ (fully allocated, again, to simplify)
Operating margin: 16k$ (16% currently)

Landed COGS: 75k$ after tariffs
Gross margin: 100-75=25k$
OPEX: 24k$ (same)
Operating margin: 1k$

So i am not sure in which universe Porsche can be expected to absorb this ?

I think you and I are making the same point. Although, in the US, the transfer is to PCNA, who then sell to the dealer, so the transfer price is likely higher than you are figuring ( and so the tariff would also be higher), which makes it even worse (negative operating margin). PAG might be able to play with the transfer price a bit but I don't know how much.

 

[PrudentOcean]

As long as Porsche isn’t losing money on the cars they could import the cars now, sell them, and make a small profit. Not the profit they would like to make, but they wouldn’t lose money.

 

[r2thek]

Having no idea if this is right, what If the cars are sold for $100k and that is 40% profit, and they leave all of that profit margin to the dealers to deal with, it seems to me the tariff is 25% of $60k. much more manageable.

Sponsored