After Renault, Volkswagen pulls plug on EV battery subsidiary IPO

Volkswagen is pushing back plans to list its electric vehicle (EV) battery-making subsidiary PowerCo SE in the face of potential declining EV demand.

European car giant Renault also changed its roadmap for publically listing its EV company Ampere amid similar market slowdown anxiety.

Bloomberg reported that scale-back plans also come amid Volkswagen’s doubt over its battery business competitiveness. Therefore, the company now intends to list PowerCo SE by this or the next year.

This news brought down VW shares as much as 1 percent and the stock is down 1.9 percent over the past year. The company is taking extra measures and moving forward until the market achieves robust growth, told people familiar with this matter.

In June 2023, Volkswagen CEO, Oliver Blume said an initial public offering was a tangible option at the right time. However, the latest pause indicates the risks that VW is observing in the shifting EV market trends.

There have been certain issues in Volkswagen’s software department that have appeared in the past vehicle launches.

The uncertainty in the EV market is also leading doubts in some of the automotive giants including General Motors and Ford to reduce plans for EV development.

Volkswagen is planning to invest 20 billion euros ($29 billion) in battery plants to output cells for 3 million EVs per year. The firm has started construction of two factory locations in Europe, while a third site is planned for Canada.