Salzgitter, Germany, December 17, 2025 – Volkswagen’s battery subsidiary, PowerCo SE, is intensifying its search for external financing options as the German automotive giant tightens its investment budget, the company’s CEO, Frank Blome, confirmed. This move comes after Volkswagen reported a 1.3 billion euro ($1.5 billion) loss in the third quarter and faces mounting pressures from competition in China, U.S. tariffs, and the expensive global shift toward electric vehicles (EVs).

Blome emphasized that while PowerCo is currently adequately funded, the subsidiary is “examining external financing more intensively than before.” Speaking ahead of the launch of early-stage European battery production at PowerCo’s flagship Salzgitter factory, he stated:

“We know that if the corporation generates less money, we have to operate with less money. That’s how it is, or we have to tap into other sources.”

PowerCo’s Mission: European EV Battery Production

Founded in 2022, PowerCo represents Volkswagen’s ambitious push to achieve battery technology sovereignty in Europe and compete with leading EV battery manufacturers like BYD and Tesla. The company’s goal is to produce its own batteries for Volkswagen’s electric vehicle lineup and reduce reliance on external suppliers.

Currently, two additional PowerCo sites are under construction:

• Valencia, Spain
• St. Thomas, Ontario, Canada

Once completed, these facilities are expected to have a combined capacity of up to 200 gigawatts in the coming years. Originally, PowerCo had planned six battery factories in Europe alone by 2030, targeting 240 gigawatt-hours of production capacity. However, these ambitions were scaled back due to slower-than-expected EV adoption in the region.

Funding Options and Strategic Moves

Volkswagen has explored several possibilities to support PowerCo’s expansion, including:

• Bringing in external investors
• Entering strategic partnerships or joint ventures
• Potentially launching an initial public offering (IPO), although a listing is unlikely before its factories become fully operational

Blome noted that PowerCo has already reached out to potential investors but did not provide further specifics. The company continues to prioritize its European battery production while monitoring global EV market trends.

Broader Industry Context

The European automotive sector is undergoing a significant transformation, accelerated by the European Commission’s recent plan to ease the EU’s effective ban on new combustion engine cars from 2035. This move, influenced by pressure from the auto industry, reflects the challenges automakers face in balancing sustainability goals with market realities.

Volkswagen’s financial strategy reflects broader industry dynamics, including tightened budgets, competitive pressures from China and the U.S., and the high costs of transitioning to electric vehicles. For PowerCo, securing additional funding will be critical to maintaining its technology development, expanding production capacity, and strengthening Volkswagen’s position in the global EV market.