Porsche AG (OTC:POAHY) has decided to end the production of some of its internal combustion engine models earlier than planned, as the company accelerates its transition to electric vehicles.

This comes after Porsche's parent company Volkswagen (OTC:VWAGY) recently invested $5 billion in Rivian Automotive (NASDAQ:RIVN), a rival to Elon Musk's Tesla Inc. (NASDAQ:TSLA), as part of its global expansion strategy in the electric vehicle market.

What Happened: The German automaker will discontinue the production of petrol-powered versions of its SUV model Macan for non-European markets by 2026, earlier than initially projected, reported Reuters. The company will then focus on electric versions of the Macan to further its sustainability agenda.

Production of the combustion engine versions of the Boxster and Cayman sports cars, known as the 718 model range, will cease next year. Porsche is already concentrating on the electric versions, which are set to be launched in 2024. The production of petrol-powered versions of the 718 and Macan for European markets has already been stopped.

Albrecht Reimold, a member of Porsche's executive board, stated that the decision was driven by the end of the platform's cycle. Despite a recent decline in electric vehicle demand, the company remains committed to its electric vehicle strategy.

Why It Matters: The automotive industry is experiencing a significant shift towards electric vehicles. A report by the International Energy Agency predicts that nearly one-fifth of cars in the U.S. and the European Union will be electric by 2030. This shift is expected to reshape the global auto industry and reduce oil consumption for road transport.

However, the transition to electric vehicles has not been without its challenges. The market's slower-than-expected adoption of EVs has prompted major automakers to rethink their strategies. In response to the EV market's slowdown, consumer preferences and OEM investments have shifted from electric vehicles to hybrids as a bridge solution.

Investor Gary Black has praised Volkswagen's move to invest in Rivian, describing it as a strategic fit, highlighting Volkswagen's capability to manage autonomous auto businesses across its distinct brands like Audi, Bentley, Lamborghini, and Bugatti.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote