Volkswagen Group is reportedly planning a further “significantly lower” budget for its battery subsidiary, PowerCo SE, in the automaker’s current five-year planning round. The reduction is largely attributed to a slower-than-anticipated growth in electric vehicle (EV) uptake across Europe and North America, according to a report by German business newspaper Handelsblatt, citing internal company sources.
The revised five-year plan for PowerCo is now expected to feature only a mid-single-digit billion-euro figure for investment. This marks the third publicly noted reduction from the initial allocation of €15 billion, following previous cuts to €12 billion and then €10 billion. Group Chief Financial Officer Arno Antlitz recently stated, “We are now significantly below €10 billion.” A company spokesperson confirmed to Handelsblatt that the expansion of the battery division would be “temporally stretched and accordingly reduced.”
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To manage the financial commitment, Volkswagen is reportedly seeking alternative funding pathways for its subsidiary. Options under consideration include attracting external investors for PowerCo, exploring new joint-venture structures for individual battery plants, and investigating state funding opportunities. An initial public offering (IPO) remains a potential long-term strategy.
The revised investment plan reflects a scaling back of PowerCo’s initial ambitions. The subsidiary was originally established with a goal of building six battery cell plants. This target has been cut to three sites: Salzgitter (Germany), Valencia (Spain), and St. Thomas (Canada). Furthermore, reports suggest that even these three plants will only require about half of their originally planned capacity by the end of the decade, leading to a slower ramp-up for the European facilities.
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In a key operational milestone, PowerCo is scheduled to begin production of its first unified battery cell at the Salzgitter plant in mid-December. The cell, unveiled in production version in September, is slated to debut in upcoming small battery-electric models from the VW, Skoda, and Cupra brands. The unified cell was originally intended to be integrated into up to 80 per cent of all the group’s electric vehicles by 2030 to reduce complexity and cost.
The Supervisory Board for Volkswagen is scheduled to meet on Thursday to finalize the five-year plan, a critical planning round that also determines model strategy and plant allocations. The company has faced repeated delays in finalising this annual process, missing its customary November deadline for the second consecutive year.