A post was merged into an existing topic: Automotive Industry Electric Vehicles
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- Volkswagen is no longer prioritizing a stake sale or potential listing of Powerco this year or next year due to the cooling of EV market, people familiar with the matter said.
- The company is also facing doubts it can produce its own batteries at scale.
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Volkswagen refutes the claim that it was postponing the planned Powerco stake sale and IPO.
“The interest we see from investors remains high,” Volkswagen said in a statement.
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The company said it still plans to sale the stake in 2024 and that IPO remains a a “tangible option in the future.”
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- Volkswagen’s Scout Motors begins construction of its $2 billion South Carolina SUV EV plant.
- The plan is expected to open in 2027 with annual production capacity of 200,000 vehicles.
- Scout Motors received $1.3 billion incentives from South Carolina.
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- Volkswagen Group entered an agreement with Mahindra for supply of its electric components and use of its unified cells.
- Volkswagen said the agreement will run for severall years and will have a total volume of 50 GWh.
- Mahindra plans to launch five new all-electric cells based on Volkswagen’s electric platform, starting December 2024.
Context
- Mahindra is an Indian multinational authomotive manufacturing company that generated a revenue of $15 billion in 2023.
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- Volkswagen entered into agreement with XPENG for fast joint development of two smart EVs.
- The EVs are expected to come into the market by 2026.
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Thomas Schmall, CEO Volkswagen Brand said Powerco will not be listed until its factories are operational and unified cell is in use.
“In a second step, an IPO remains an option for the future,” Schmall said. “However, this will only become an issue once the factories are up and running and the standardised cell is in use.”
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That means the listing will likely not take place until 2027, three years longer-than planned.
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CEO Oliver Blume told the FAZ newspaper that Volkswagen “cannot keep up at the top of the table at the moment” in China’s EV space.
“If we reach a two-digit market share in the long-term in a rapidly growing Chinese market, that is already a very respectable goal,” he said.
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Volkswagen’s total market share in China dropped to 14% in 2023 from 18% in 2018.
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- Volkswagen said it has developed an architecture for electric and intelligent cars in China with its partner Xpeng.
- The China Electrical Architecture (CEA) will be used to develop locally VW-branded EVs from 2026.
- CEA will reduce costs by about 40% compared to the MEB platform.
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Volkswagen brand shifts their focus to plug-in hybrids from EVs.
"Customers want plug-in hybrids now, including in China and the US,” said CEO Thomas Schäfer on the sidelines of an auto-industry conference in London.
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Bloomberg notes that Toyota has been benefitting from a surge in global demand for hybrids.
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- Volkswagen talks with Renault to jointly develop an affordable EV version of Twingo car has collapsed, Reuters reported citing people familiar with the matter.
- Volkswagen declined to comment on the talks but said it was still weighing options on cheap EVs.
- Twingo is expected to come to the market by 2026 and will cost less than 20,000 euros.
https://europe.autonews.com/automakers/renault-confirms-talks-vw-over-electric-minicar-venture
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- AUDI and SAIC extend partnership to jointly develop a new platform dubbed the Advanced Digitized Platform that will be used to build three new premium EVs for the Chinese market.
- The first model is expected by 2025 with time-to-market reduced by more than 30%.
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- The U.S auto safety regulator opens a recall query into around 51,500 Volkswagen America EVs over reports that their doors opened while driving.
- The complaints affect mainly ID.4s built between 2021 and 2023.
- The regulator notes that the vehicles were part of Volkswagen’s prior recall to solve water seepage from the door.
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Volkswagen delays the launch of ID.7 in U.S and Canada citing market dynamics.
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- CFO Arno Antlitz told Bloomberg that it may take longer than plan for its Powerco unit to ramp up productions in Europe due to weak EV sales.
- Powerco planned to supply battery cells to about 3 million EVs by 20230.
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Volkswagen said it has decided to bring an all-electric EV in the price range of around 20,000 euros to the European customers.
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Volkswagen said they will rely more on localisation in the the development of the entry-level EV which will premiere in 2027.
“Despite the attractive price, our electric cars will set standards in the entry-level segment in terms of technology, design, quality, and customer experience,” Thomas Schäfer, CEO of the Volkswagen Brand Group Core said.
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Volkswagen pointed out that preparations are under way to bring the under 25,000 euros to the market as early as 2025.
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Volkswagen shifts strategy to develop next generation software-defined vehicle (SDV) as a joint venture with Rivian and not internally with Cariad
- Volkswagen is investing $1 billion in Rivian Automotive.
- Addionally, the two companies will create a joint venture (50% stake by each company) for a joint creation of a electrical/electronic architecture for EVs.
- The investment by Volkswagen could rise by another $4 billion by 2026 subject to further review of the technical feasibility of Rivian’s existing E/E architecture on Volkswagen’s vehicles.
- Volkswagen will pay out $2 billion in 2024, hence they are lowering their automotive cash flow guidance to a range of 2.5 billion EUR and 4.5 billion EUR (previously: 4.5 billion EUR to 6.5 billion EUR) and liquidity to a range of 37 EUR billion and 39 billion EUR (previously: 39 EUR billion to 41 billion EUR).
- In a webcast call, Volkswagen said the investment is not part of the 180 billion euros budgeted for 2023 to 2027 but the benefits will drive down costs in future.
- They also pointed out in the call that the partnership will hit products coming in in the second half of 2025.
Wiki article: Volkswagen:Strategy - InvestmentWiki
Assessment
Rivian is one of the few automakers that have adopted zonal architecture which significantly reduces the cost of producing EVs. Also its products look good. I specifically liked that the controls and the display on the steering wheel work seamlessly (min 6:00). As such, the partnership puts Volkswagen steps ahead in the development of an EV architecture.
Also, the joint venture replaces Cariad in the development of high-end EV platforms (PPE and above) that it hasn’t been able to deliver due to software delays. For instance, Porsche had to delay production of the EV Macan for two years due to the Cariad issues and was only able to start production after entering into a partnership deal with Google Android Automotive. That said, I think we are now almost certain that Audi A6 e-tron and Audi Q6 e-tron will be delivered as scheduled since Volkswagen will be able to utilize Rivian’s existing architecture over the short-term -until the joint venture architecture comes in play in the second-half of 2025.
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Neutral, €128: Analyst Jose Asumendi views the joint venture with Rivian as positive even though details are still lacking. He pointed out that Volkswagen’s strategy in various regions has developed in such a way that it will have the opportunity to tailor solutions for each market.
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Neutral, €136: Analyst Stephen Reitman of Bernstein welcomed the partnership with Rivian.
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Sell, €120: Analyst Patrick Hummel of UBS said the joint venture with Rivian will in theory lead to lower development costs and reduced risks. However, it remains to be seen how the start-up culture of Rivian and that of the “supertanker” VW will fit together.
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Buy, €165: Analyst Fabio Hölscher of Warburg Research thinks the deal with Rivian could immediately take Volkswagen several steps in the development of electrical or electronic architecture for its vehicles. He also sees a faster pace of development in sight due to the partnership.
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Buy, €136: Analyst Romain Gourvil of Berenberg said the deal with Rivian is a relief to the struggling Cariad. He views the partnership as Volkswagen’s acceleration of software-defined vehicle platforms (SDV)'s development for the western markets.
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Neutral, €140: Analyst George Galliers of Goldman Sachs welcomed the partnership as long as it would reduce the necessary overall investments as promised by the company. He sees the two companies as having great technologies.
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Buy, €140: Analyst Tom Narayan of RBC thinks that the joint venture is all about software. That a takeover of Rivian is unlikely but if it fails, Volkswagen may takeover the joint venture.
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Hi Aron,
Thank you for the context and assessment. Where does it say that Volkswagen will be able to utilize Rivian’s existing architecture over the short-term? My take of the situation was that Volkswagen still needs to finalize it’s due diligence into Rivian to conclude that Rivians tech can be applied to Volkswagen vehicles at scale. This would imply that we are at an early stage and far from Volkswagen licensing tech from Rivian.
Can you remind me for when the Audi A6 e-tron and Audi Q6 e-tron are scheduled?
Here:
“Both companies aim to launch vehicles benefitting from the technology created within the joint venture in the second half of the decade. In the short term, the joint venture is expected to enable Volkswagen Group to utilize Rivian’s existing electrical architecture and software platform.”
Deliveries of Audi Q6 e-tron is expected to begin in August 2024 while Audi A6 e-tron is scheduled to debut in summer 2024.
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