Porsche will abandon its plans for mass production of its own batteries, the German sports car manufacturer announced. This is yet another blow to Europe's efforts to establish itself in the field of electric vehicles.

"Porsche will discontinue the production of its own battery cells for reasons related to volume and lack of scale. Electromobility will remain a key method of propulsion for our sports cars in the future," said Porsche CEO Oliver Blume.

The IG Metall union said earlier that about 200 of the 286 workers at Cellforce Group, Porsche's battery manufacturing subsidiary, would be laid off today.

Without mentioning specific numbers, Porsche confirmed that there would be layoffs. The company said Cellforce Group would focus on research and development.

Some Cellforce employees will be able to find work at PowerCo, a battery manufacturing start-up owned by Porsche's parent company, the larger Volkswagen Group, Porsche added.

Batteries, typically the most expensive part of an electric vehicle, have become a key battleground for automakers and the automotive sector as a whole.

However, European companies are struggling to establish themselves in the market in competition with Chinese battery manufacturing giants such as CATL, which is fueling concerns about the long-term future of the continent's automotive industry.

Swedish company Northvolt, Europe's best-known battery manufacturer, filed for bankruptcy in March, and most of its assets are now being acquired by US competitor Lyten.

Porsche announced in April that it would abandon its plans to increase battery production at Cellforce, citing uneven demand for its electric vehicles. | BGNES