Volkswagen is putting stock market plans for PowerCo on hold
Volkswagen is said to have doubts about being able to implement its own battery production on the planned scale. This was reported by the news agency Bloomberg, citing informed persons. As a result, battery subsidiary PowerCo may not be opened up to external investment for the time being. Talks with potential investors are currently on hold, Bloomberg reports. And Volkswagen is no longer giving priority to a possible stock market listing of the PowerCo business this year or next.
However, the news agency also quotes its sources as saying that the situation has not yet been finally decided and that Volkswagen could still push ahead with the plans as soon as market conditions improve. When asked by the news agency, Volkswagen itself reiterated its intention to “open up the capital structure from this year and continue to evaluate our options in light of the market environment”. The rise of the electric car market is not as strong as expected, but investor interest in PowerCo remains high, Volkswagen said in its response.
At the VW Capital Markets Day in June, Volkswagen CEO Oliver Blume said that an IPO of the battery subsidiary was a concrete option at the right time. The unit, which will be founded in 2022, plans to invest 20 billion euros in battery plants to supply cells for 3 million electric vehicles per year. The capital requirement is therefore huge.
Since its foundation a year and a half ago, PowerCo has identified three locations for cell factories – Salzgitter, Valencia and St. Thomas in Ontario/Canada – all of which are now under construction. Production is scheduled to start in Salzgitter in 2025 and in the other two plants in 2026 and 2027. By 2030, PowerCo plans to build and operate battery cell plants with a total production capacity of 240 GWh in Europe alone.
If VW stays the course, PowerCo will cover half of the carmaker’s battery needs by 2030 and form a giant with 20,000 employees, Bloomberg added. More than 70 per cent of Wolfsburg’s sales in Europe and more than 50 per cent in North America are expected to be fully electric by then.
Incidentally, Volkswagen would not be alone in withdrawing from the stock market: Renault just announced that it was cancelling the IPO of its electric car division Ampere planned for the first half of 2024 – at least for the time being. The current conditions on the stock market are not suitable for this, according to the statement.