Volkswagen Still Seeking Investor for Battery Unit Despite Slower EV Growth

Germany’s Volkswagen is still seeking a strategic investor for its battery unit this year and an IPO remains an option in the future, the biggest automaker in Europe told Reuters after reports emerged that the car manufacturing giant has delayed plans for an initial public offering or welcoming a strategic investor.  

Earlier on Tuesday, Bloomberg News reported, citing unnamed sources with knowledge of the plans, that Volkswagen is delaying IPO plans for its battery unit Power Co, and has put negotiations with potential investors on the backburner amid signs of slowing growth in electric vehicle uptake.  

The timeline for looking for an investor this year has not changed, Volkswagen told Reuters.

“The interest we see from investors remains high,” the car manufacturer said.

A possible IPO remains a “tangible option in the future,” Volkswagen added in a statement to Reuters.

Power Co says it aims to become a global battery player.

“The company’s major strength will be vertical integration from raw materials and the cell through to recycling,” according to its website.

Even if Volkswagen keeps its timeline for seeking a strategic investor, evidence is mounting that the EV sales growth has slowed down over the past year, even in the biggest market, China.

Price affordability, anxiety over battery range, a lack of a widespread network of charging points, and higher insurance costs are the key reasons for consumers thinking twice before buying an electric vehicle.  

In November, a group of U.S. car dealers warned the Biden Administration that most U.S. car buyers aren’t interested in purchasing EVs, incentives or not.

In a letter addressed to U.S. President Joe Biden, the group asks the Administration to pump the brakes on federal regulations that would require two-thirds of all vehicles sold in the United States in 2032 to be electric—because it simply isn’t what car buyers want, even with the current incentives.

“The reality is that electric vehicle demand today is not keeping up with the large influx of BEVs arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots,” the letter read in part.  

By Charles Kennedy for Oilprice.com

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