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Ford Partner VW Pulls Back On EV Battery Spinoff Unit

Ford’s decision to separate its ICE, EV, and commercial businesses into unique entities wasn’t something that its rivals emulated, for the most part, and it was a move that at least one other automaker panned publicly. That group included, at least at first, Volkswagen, which continues to enjoy the fruits of its partnership with Ford. Nearly one year ago, VW announced that it would be bringing production of its drive units in-house in an effort to cut costs, but slowing demand recently prompted the company to cut its planned EV production and push back plans to build an affordable all-electric model. Now, that fallout continues, as Volkswagen is reportedly pumping the brakes on its planned EV battery spinoff as well, according to Bloomberg.

Volkswagen ID.3 - Exterior 003 - Side

Previously, VW was seeking outside investors for its new EV battery unit – dubbed PowerCo – and planned to go public as well, but now, it’s putting those talks on the back burner amid falling demand for electric vehicles, a source explained. That spinoff has essentially been put on ice for now, with the automaker placing less emphasis on those efforts amid doubts that it can build EV batteries at scale given current costs and projected sales growth.

However, it is worth noting that this situation remains fluid, according to the same source, who noted that VW could change course and move forward with its plans if the market changes over the coming months. Initial public offerings experienced their worst year in 2023 as interest rates soared, meaning that it’s unlikely to go public unless things improve dramatically.

In terms of the future of PowerCo, Volkswagen said that it’s willing to “open the capital structure and continue to evaluate our options against the backdrop of the market environment,” adding that even though EVs are experiencing a bit of a slowdown at the moment, investor interest in the spinoff “remains high.” Originally, VW was expected to invest $20 billion in battery plants that would supply units for three million EVs annually, with two European sites already under construction.

We’ll have more on everything Ford’s competition is up to soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comments

  1. Francois

    The spinoff’s been put on ICE. LOL, the irony.

    Reply
  2. I am, wright

    VW is the smart one here

    Reply

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