According to Reuters, Thomas Schmall, head of Volkswagen Group's battery business, stated that Volkswagen Group would not consider taking its battery business, PowerCo, public until the battery factory is operational and the standardized battery cells are deployed. This essentially rules out the possibility of an initial public offering (IPO) for the battery business before 2026.
Schmall said, "The IPO, as a second step, remains an option for the future. However, it's only when the factory is up and running and the standardized battery cells are deployed that this becomes a consideration."
In mid-2022, Volkswagen Group split its battery business and planned to invest €20 billion (around $21.7 billion) jointly with partners to build battery factories, aiming to achieve a capacity of 240GWh by 2030 to better control the supply chain and catch up with Tesla. According to Volkswagen Group's plan, its battery business is expected to achieve €20 billion in sales by 2030.
As of now, PowerCo has announced plans to open battery factories in Salzgitter, Germany, Valencia, Spain, and Ontario, Canada, in 2025, 2026, and 2027, respectively. Volkswagen Group plans to start using standardized battery cells on at least 80% of its electric vehicles starting in 2025, so PowerCo could potentially IPO as early as 2026.
Furthermore, Schmall also for the first time excluded the possibility of building another factory in Europe. "From a competitive and cost perspective, this issue is not currently being discussed."
Due to high borrowing rates, the activity in the IPO market fell to its lowest level since 2016 last year. Chris Burns, CEO of battery material supplier Novonix, said, "Public market investors want to see cash flow." Burns stated that battery manufacturers need to sign supply agreements early and establish strong partnerships with automotive manufacturers to gain trust.
