German automaker Volkswagen has deferred the stock market listing for its battery unit until its factories are up and running and its unified battery cell is in use, the division’s boss told Reuters. The possibility of an IPO has been ruled out until 2026. This so far gives the best indication for when Europe’s top carmaker may float its PowerCo battery business on the stock exchange, as a follow-up to bringing in an outside investor or entering strategic partnerships with other cell manufacturers.
The IPO will be the step that comes after these achievements. “In a second step, an IPO remains an option for the future. However, this will only become an issue once the factories are up and running and the standardised cell is in use,” he said.
Upcoming battery cell factories
In mid-2022, the automaker split off its battery unit, investing 20 billion euros (USD 21.7 billion) with partners to build plants reaching 240 gigawatt hours of capacity by 2030. The move is aimed to give it greater control of its supply chain and help it catch up with US EV giant Tesla and others. Volkswagen’s battery unit aims for 20 billion euros in sales by the end of the decade and plans to set up three battery cell factories in Salzgitter, Valencia and Ontario by 2025, 2026 and 2027, respectively. Schmall, for the first time, ruled out another plant in Europe for now.
Unified cell
Volkswagen plans to use its unified cell technology – a single cell design available in three different chemistries – across at least 80% of its electric cars from 2025. This would make 2026 the earliest time when Schmall’s conditions for a listing would be met. So far, the battery unit PowerCo has shied away from being specific about the timing of a potential IPO. It has only made clear that it plans to have the business investor-ready from 2024.
Cooling down of EV market
The decision to defer the IPO of PowerCo comes at a time when the capital-market enthusiasm for EVs has cooled as sales growth has slowed down as well and financial losses have piled up. Smaller companies like Polestar and Fisker have been struggling to amass the finances for EV development with the latter declaring that it faces going-concern risks.