Written by James Newsome
As I reflect on my transition from accounting to investment management, I’m reminded of how different the two worlds really are. Accounting is grounded in precision and historical clarity; investment management, by contrast, demands forward thinking and a constant awareness of global dynamics. Over the past six months at Williams Investment Management, I’ve come to appreciate that markets aren’t moved by numbers alone—they’re shaped by policy shifts, political decisions, evolving consumer behaviour and sometimes, nonsense. While accounting involves estimates, its far closer to being a hard science than investment management ever will be.
Those who listen to the “Just Williams” podcast, will know that we’ve long been sceptical about the transition to green energy. While we recognise the advantages of moving away from fossil fuels, we’ve often questioned the practicality and pace of current policies. While I’m still early in my career, recent developments in the automotive sector have reinforced the importance of questioning consensus and examining assumptions—especially when the evidence begins to shift.
In the last few weeks, one of the world’s leading vehicle manufacturers—Porsche—announced a significant strategic shift. The company will delay the rollout of new EV models and instead expand its lineup of combustion-engine and hybrid vehicles. The market reacted swiftly: Porsche’s share price fell over 7% following the announcement.
The company cited “special expenses” related to battery development and strategic realignment, including rising costs from Cellforce, its battery unit. Developing new internal combustion engine (ICE), hybrid, and EV models requires substantial upfront investment, and while those costs are being incurred now, the returns are being pushed further into the future. One estimate suggests this delay could cost Porsche up to €1.8 billion in operating profit by 2025.
This decision is particularly striking given the EU’s planned ban on petrol and diesel car sales from 2035. Porsche stated that non-electric options will remain available well into the 2030s, a stance that’s likely to be unpopular in Brussels especially.
Germany’s powerful auto sector, which supports over 780,000 jobs, is increasingly squeezed between EU climate targets and the rising costs of domestic manufacturing. Ironically, while Germany pushes automakers toward electrification in the name of climate policy, it has closed its nuclear power plants and now leans heavily on lignite — one of the dirtiest forms of coal and in fact fossil fuels in the world, just to keep its grid running.
Private buyers remain hesitant to adopt EVs unless the price, performance, and charging infrastructure meet expectations. Much of the growth in EV sales has come from fleet purchases and government incentives—not from organic consumer demand. And Porsche is not alone in facing headwinds.
The end of EV subsidies in the U.S. has already led several automakers to scale back production and cancel models. Even in Europe, delays to combustion engine bans and calls for new exploration in the North Sea suggest a more pragmatic approach to energy policy is emerging. If policymakers had listened to the Chair and CEO of Chevron, Mike Wirth, they might have reached that conclusion sooner.
As someone just beginning a career in investment management, I suspect that even when I eventually retire, petrochemical stocks may well still be part of my personal and client portfolios. The road to green energy is not a straight line—and Porsche’s pivot is a reminder that realism must temper idealism in both policy and investment strategy.
It’s also worth noting that car manufacturers, despite their global presence and brand prestige, have historically been poor investments. They operate in capital-intensive, cyclical, and fiercely competitive markets, with razor thin margins and unpredictable returns. The EV transition has only added complexity—requiring billions in upfront costs with uncertain payoffs.
Some may question why Porsche matters—it’s a luxury brand, after all. But its parent company is Volkswagen, one of the largest automakers in the world. Porsche’s pivot raises serious questions about what’s being discussed in Volkswagen’s boardroom regarding the future of EVs.
Just as I go to press send on this piece, I spot a headline which reads: “Ferrari halves EV targets as profit guidance disappoints”. Ferrari now plans for only 20% of its lineup to be fully electric by 2030, slashing its previous target of 40%. Shares are down circa 20% since the announcement.
