Porsche to back petrol cars despite Rachel Reeves threatening £15,000 penalty per vehicle

The move goes against the UK's current trajectory towards net zero and its Zero Emission Vehicle mandate which would require all new car sales to be electric by 2035..

Under the ZEV mandate, carmakers will need to have at least 28 per cent of new car sales be electric by the end of the year or they could risk facing hefty penalties of £15,000 per non-compliant vehicle.

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Despite the threat of penalties, the German carmaker said it would keep creating "additional vehicle models with combustion engines or plug-in hybrids".

The carmaker also overhauled its previous targets to have 80 per cent of its vehicle sales electric by 2030 after consumer appetite dropped. Sales of the electric Taycan model were particularly impacted, falling by almost 50 per cent.

In November, Porsche's finance chief Lutz Meschke said: "We are currently looking at the possibility of the originally planned all-electric vehicles having a hybrid drive or a combustion engine.

"We are currently in the middle of making conceptual decisions. What is clear is that we are sticking with the combustion engine for much longer."

During its latest investor call, the car brand also said it expected to report revenues between £32.5billion and £33billion this yearrepresenting a profit margin of just 10 to 12 per cent this year, below expectations of 14.8 per cent.

On top of the fall in profit, the company will also take a £666million hit to profits to launch its new combustion engine and plug-in hybrid models.

A Porsche spokesperson added: "During the transformation phase it is very important to have a flexible range of drivetrains, because the framework conditions change and the different regions of the world develop at different speeds.

"The change to electric cars is taking longer than we assumed five years ago. We are therefore currently taking a very close, customer-oriented look at how we are positioning our portfolio."

Meanwhile, analysts from Deutsche Bank explained that this could be the car brand's "last shot to prove they can turn around this business before losing more trust of long-term shareholders".

Porsche isn't the only carmaker to U-turn its plans to build electric vehicles due to lapsing market demand. Other brands such as Mercedes-Benz and Renault have also massively reduced their EV commitments after seeing their sales take huge hits.

Renault instead decided to focus on hybrid vehicles with its CEO Fabrice Cambolive explaining that it was "the easiest way to have low-consumption cars and to prepare our customers to go to EVs".

He shared: "When you go to the lower segments, if you can't afford to charge the car, you have a full-hybrid solution, and it's far enough. Otherwise, you shift to EV. You can put a big tank, you can put four 'engines' - but you need space to do that in a car, basically, and with some cars up to 4.4 metres, I don't know if it's worth it."

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In December, Labour said "certain flexibilities" could be added to the ZEV mandate to help more car makers get on board with the rules without risking penalties.

The flexibility follows warnings from car manufacturers about electric vehicles remaining "stubbornly more expensive" with consumers wary of investing in them.