Unlike Renault, Volkswagen still plans to list its battery-electric subsidiary

Volkswagen is not reducing its ambitions. The German manufacturer, the world’s number two, confirmed this Tuesday that it is still pursuing the launch of PowerCo, its subsidiary created in 2022 specializing in electric batteries.

“IPO is a tangible possibility for the future,” the group said in a statement.

The German giant thus contradicts the claims of the Bloomberg news agency. She announced on Tuesday that due to the unsatisfactory situation on the electricity market, Volkswagen has adjusted its plans and does not consider the search for financial partners or the listing of PowerCo to be a priority this year or next year. Claims that Volkswagen has denied, saying it is ready “open the capital structure” from PowerCo.

“Volkswagen Group is sticking to its master funding plan for the PowerCo ramp-up and continues to prepare investors to be ready from 2024,” we can read in the press release.

Before the electric battle, Volkswagen would aim to save 10 billion euros

It must be said that this Monday was marked by an announcement that seemed like a bolt from the blue for the sector. Renault actually surprised by canceling the spring IPO of Ampere, its entity combining electrical and software activities. A major strategic turnaround and a warning for the electronics sector, which, apart from Tesla, has struggled to convince investors. The automaker also attributed the change in course to unmet market conditions, adding that it has enough cash to finance the acceleration of its transition to electric power.

Headwind to electricity

But Volkswagen acknowledges this in its press release “The growth of fully electric vehicles is steady, but not as fast as expected.” Indeed, 2023 was another year of strong growth for electric vehicles in Europe: +37% sales in one year with more than 1.5 million units sold. First of all, sales of electric cars with a 14.6% market share surpassed sales of diesel cars (13.6%) for the first time in a whole year. And for the first time in history, the best-selling car in the world became an electric car (Tesla Model Y).

Several downsides persist: in Europe, sales of new electric cars fell in December for the first time since April 2020. They fell by -16.9% year-on-year with 160,700 units sold. The decline can be attributed to the German market, Europe’s largest, which came to a standstill after a decline and then the end of the year-end end of government aid to buy electric cars. The fact remains that despite this decline, sales of electric cars increased (+11%) for the entire year in Germany. But a situation that could reverse in 2024: The Federation of German Automobile Manufacturers predicts an unprecedented 14% drop in sales of all-electric cars in the country, according to data released this Tuesday. Including traditional engines, car sales should even drop by a total of 1%.

(With AFP)