Volkswagen AG in planning phase for Porsche IPO

What is a head for Porsche? An IPO, independence and an electrified future.

Volkswagen AG and Porsche Automobil Holding SE are currently in advanced discussions regarding a possible IPO of Dr. Ing. hc F. Porsche AG, the company revealed in a press release on Tuesdayconfirming rumors that are at least a year old.

The automakers have brokered a deal that will form the basis for Dr. Ing’s IPO. hc F. Porsche AG – the Porsche automotive business.

The money made from the spinoffs could help fund Volkswagen’s costly shift to producing electric vehicles.

A family holding

But note that the talks involve Porsche SE over the fate of Porsche AG.

Porsche AG could once again come under the control of its founding family.

Porsche SE is a holding company founded in 2007 and owns the majority of ordinary shares in the Volkswagen Group, which includes Volkswagen Passenger Cars, Audi, Seat, Škoda, Bentley, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania and MAN. Porsche SE is controlled by the Porsche and Piech families, which own 31.4% of VW’s shares and control 53.3% of its voting rights through Porsche SE.

The plan would strengthen family control of Porsche, which was founded by their ancestor Ferdinand Porsche, and loosen their grip on Volkswagen AG.

Porsche SE was created when Porsche tried to take over the much larger VW Group. But funding could not be secured, and Porsche AG was instead acquired by Volkswagen AG, becoming a subsidiary. But Porsche SE remained a separate legal entity.

Far from done

Third meeting of Diess shareholders
Volkswagen Group CEO Herbert Diess, whose boards have yet to approve Porsche’s IPO plan.

But while the talks are at an advanced stage, it is far from over. Automaker Says Deal Hasn’t Yet Been Approved by Volkswagen AG’s Management Board and Supervisory Board; a final decision has not been made, and neither the board of directors has approved the deal, nor the executive board and supervisory board of Porsche AG.

In a separate statementPorsche Automobil Holding SE has confirmed that it is currently in advanced talks with Volkswagen AG regarding a possible IPO and where it stands.

“Even if the corresponding resolutions were to be passed, the implementation of the transaction would still be subject to further reviews, including final approval by the boards of directors and general market developments,” Porsche said. AG. “The company will inform the public and the capital market of subsequent relevant developments in accordance with legal requirements.”

A tangled story

Ferdinand Alexander Porsche and the original Porsche 911, which he helped design decades ago.

Volkswagen’s beginnings as a company were partly due to Ferdinand Porsche, who designed the Volkswagen Type 1, which would become the Volkswagen Beetle. And when Porsche started its own sports car company, early models depended on the Volkswagen parts it created.

Although the two companies share a common parent company, they also have a history of collaboration. It all started in 1969, with the VW-Porsche 914 and 914-6, the first equipped with a Volkswagen engine and the second with a Porsche engine.

Seven years later, the automakers teamed up to produce the Porsche 912E and the Porsche 924. And today, parts for the Porsche Cayenne are made at the Volkswagen plant in Bratislava, Slovakia.

How much could Porsche bring in?

According to Bloomberg Intelligence, Porsche is estimated at 60 billion and 85 billion euros, or 68 billion dollars and 96 billion dollars. The current market value of the Volkswagen Group is around 112 billion euros.

Moves do not affect Porsche’s plans

Porsche Mission R - front 3-4
The new 718 is based on the track-ready Porsche Mission R.

Still, these talks aren’t dampening Porsche’s product plans.

According to Automotive News, Porsche plans to convert the production Boxster and Cayman to an all-electric version of the 718 series, based on the Mission R concept, which is approximately the size of the 718 Cayman but lower and wider. It produces 671 horsepower in “race mode”, rising to 1,073 horsepower in “qualifying mode”. Reaching 60 mph takes less than 2.5 seconds and has a top speed of over 186 mph. Charging to 80% takes 15 minutes.

How much of that will reach an electric 718 in unknown. But the next electric sports cars will be built at Porsche’s main factory in Zuffenhausen in Stuttgart, with production starting in 2023 alongside the 911, which will be the last Porsche model to be electrified. The move will cost half a billion euros and is the second to secure investment in electric vehicles after Porsche’s new Taycan plant, also in Stuttgart.

Porsche plans to have a third of its range electrified by 2025 and two-thirds by 2030. The electric 718 uses the PPE platform co-developed with Audi, and which will also underpin an all-electric Macan, which should roll off the assembly lines in Leipzig around the same time as the electric 718.

The Taycan was Porsche’s second most popular car in the United States in 2021, outselling the 911 by 624 units. However, both outsold the Macan and Cayenne SUVs.

Porsche would have produced BEVs earlier, according to published reports, but was delayed by the corporate cooperation needed to get the project off the ground. Corporate lethargy was a big source of frustration within Porsche, which would change after an IPO.

Louisa R. Loomis