Seat & Cupra profitability plummets amidst competitive pressure

CEO Markus Haupt acknowledged that while the company’s ‘Elevate’ strategy and ‘Performance Program’ initially showed positive contributions in the first half of the year, the market environment has become significantly more demanding in the third quarter. The accelerated pace of electrification, even exceeding rates in countries like Germany and France, has presented new challenges, with electric vehicle (BEV) margins remaining lower than those of combustion engine vehicles.

Despite positive sales figures for key models like the Cupra Raval, the company has had to make substantial investments, including launch campaigns and market entry costs.

“The low profitability and cash generation threaten our ability to invest in the future of the company. The accelerated pace of electrification reinforces the urgent need to reduce the costs of our electric vehicles. We will rigorously re-evaluate all planned investments and maintain strict cost discipline,” stated Executive Vice President of Finance Patrik Andreas Mayer.

Despite these concerns, the company remains committed to its ‘Elevate’ strategy, focused on operational excellence, value creation, and the growth of Cupra. This plan has already begun to yield results, alongside ongoing efforts to control costs and improve efficiency. The company has achieved a record of 250,000 deliveries this year, largely driven by Cupra.

The Cupra Raval, the electric urban vehicle manufactured in Martorell, has been instrumental in this success, accumulating over 50,000 orders since its commercial launch in April. The company considers Martorell a cornerstone for its global expansion, particularly for its premium brand.