Volkswagen Group has reduced the planned funding for its battery subsidiary, PowerCo, as part of its latest five-year planning round. Citing a slower-than-expected electric-vehicle ramp-up in Europe and North America, the company reports that PowerCo’s budget will be “temporally stretched” and “accordingly reduced,” according to a spokesperson speaking to a German business newspaper.
Over successive planning cycles, the allocation has been cut from an initial €15 billion to €12 billion, then to €10 billion, and is now set “significantly below €10 billion,” as confirmed by CFO Arno Antlitz.
To offset this shortfall, Volkswagen is exploring alternative financing avenues for PowerCo. Options under consideration include bringing in external investors, forming new joint ventures for individual plants, and pursuing state funding. An initial public offering remains a longer-term possibility.
Production milestones continue at PowerCo’s Salzgitter facility, where the first unified battery cell is expected to roll off the line in mid-December. This in-house cell, unveiled in September, will be deployed in upcoming compact battery-electric vehicles from Volkswagen, Škoda and Cupra.
First announced in Volkswagen’s 2021 battery roadmap, the unified cell is intended to cut complexity and costs and was initially targeted for use in up to 80 percent of the Group’s electric vehicles by 2030.
PowerCo had originally been slated to build six battery cell plants; current plans call for only three – Salzgitter, Valencia and St. Thomas in Canada – with roughly half the previously planned capacity required by decade’s end. As a result, the European sites will ramp up more slowly than initially assumed.
Since its launch, PowerCo has incurred losses totaling over €2.5 billion, and with the reduced capital allocation, the subsidiary will need to operate with far less group support.
Volkswagen’s Supervisory Board is due to finalize the new five-year plan this Thursday, although key model-strategy decisions remain outstanding. Observers note the Group’s planning round is already behind schedule and may even be postponed into 2026.
Source: Electrive
