By on July 6, 2021

vw

According to a report in Automotive News, Volkswagen Auto Group is about to sell its stake in Electrify America, a company that builds chargers for electric vehicles.

The company wants to do this so that it can seek outside funding to build its own charging infrastructure.

According to the News, VW is working with Citi to find a co-investor that would be willing and able to pump $1 billion into building charging infrastructure.

Electrify America, a rival to Tesla’s Supercharger network and ChargePoint, came into the picture after VW’s diesel-emissions scandal and has been expected to spend $2 billion on the expansion of a charging network for EVs from 2017 to 2026. So far the company has 635 stations active and 125 planned.

As recently as March, Electrify America and VW made mention of plans for further expansion. Now, VW is trying to consolidate its infrastructure efforts.

The segment is attracting attention from all sorts of companies as the EV future looms larger and larger.

Renault and Shell, for example, are rumored to have an interest in becoming co-owners of Ionity, a European joint venture for charging that is already owned by OEMs such as BMW, Daimler, Ford, Hyundai, and VW.

It makes sense to see OEMs investing in charging companies and attempting to increase infrastructure to support the EVs they plan on selling. The bigger question is why VW is possibly moving away from one company and seeking out another.

Regardless, expect to see more corporate musical chairs over the next few years.

[Image: Volkswagen]

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22 Comments on “Report: Volkswagen to Sell Stake in Electrify America...”


  • avatar
    EBFlex

    Can’t blame em. Electrify Amerika is a disaster. I can see why Ford decided to partner with them. Ford’s EC compliance vehicles have a bad enough range and when you couple that with all the issues with Electrify Amerika, you really won’t be able to go anywhere.

  • avatar

    What are THE issues with Electrify America can you clarify please? How GM and Toyota do not participate in European project, what they do not care? Electrify Europe will be a system designed by committee, highly standardized, but will become obsolete in few years as it happened with GSM, Symbian, Arian and A380.

    • 0 avatar
      dal20402

      A380 was a Piëch-style triumph of “mine is bigger than yours” over any sort of business sense.

      The astute people in aviation could see before it even took its first flight that the workaday 777-300ER was going to crush it on economics.

      • 0 avatar
        28-Cars-Later

        Four points:

        1. Had Airbus gotten a prototype off the ground much sooner than the fifteen years it took it may have gone somewhere. The entire concept was to take on the 747 and it featured a double deck similar to the one McDonnell Douglas threatened to feature in the vaporware, MD-12. Both of these concepts are very late 1980s early or 1990s ideas, both of which were losing steam by the late 1990s.

        2. The A380 was designed for the hub and spoke route theory whereas the 777 (and later other long distance twinjets) were designed for the point to point route theory, which has essentially won out. Wiki says Airbus conducted 200 focus groups although it sounds as most if not all of those were with customers, and none with industry professionals. One may say, they were “fighting the last war” so to speak.

        3. I’ve read the A380 was not designed for cargo conversion at all. The 747 was from the beginning, so 747s still have use (and resale) after retirement from passenger service whereas the A380 is a one trick pony.

        4. Boeing -which clearly has fallen from grace- heavily benefitted from its earlier leadership in the industry vs Airbus in the A380 project. While Airbus was enamored with creating its own 747, Boeing already having it for twenty years went about creating the long distance 777 in the early 90s positioning itself for the industry changes in the late 90s and early 00s. When the market did change, it simply adjusted its 747 strategy accordingly whereas Airbus was only *introducing* its entry in 2005. If the same thing happened today, given the state of Boeing commercial jets Airbus would likely introduce the superior product and win the day.

        “Airbus studies started in 1988, and the project was announced in 1990 to challenge the dominance of the Boeing 747 in the long haul market. The then-designated A3XX project was presented in 1994; Airbus launched the €9.5 billion ($10.7 billion) A380 programme on 19 December 2000. The first prototype was unveiled in Toulouse on 18 January 2005, with its first flight on 27 April 2005.”

        “The A3XX design converged on a double-decker layout that provided more passenger volume than a traditional single-deck design.[15][16] Airbus did so in line with traditional hub-and-spoke theory, as opposed to the point-to-point theory with the Boeing 777,[17] after conducting an extensive market analysis with over 200 focus groups.[18][19] Although early marketing of the huge cross-section touted the possibility of duty-free shops, restaurant-like dining, gyms, casinos and beauty parlours on board, the realities of airline economics have kept such dreams grounded.”

        “The second model, the A380F freighter, would have carried 150 t (330,000 lb) of cargo over a range of 5,600 nmi (10,400 km).[158] Freighter development was put on hold as Airbus prioritised the passenger version, and all orders for freighters were cancelled.”

        https://en.wikipedia.org/wiki/Airbus_A380

        • 0 avatar

          Corey, you are confusing B787 with B777. Boeing’s P2P answer to A380 was B787. B777 was the answer to previous gen Airbus plane. Then Boeing modified B777 to replace A380 since it had only 2 engines and therefore cost less too operate. And A380 was also too big for real demand.

      • 0 avatar

        Two engines vs four always win.

    • 0 avatar
      neil733

      GM does not participate in the European Ionity project because GM is no longer present in Europe. Its former Opel and Vauxhall brands are now part of Stellantis.
      Toyota only offers one EV in Europe at present, and that is the Proace van, a rebadged Peugeot Expert/Citroën Jumpy, built by Stellantis.

      The big question is why Stellantis, with its many BEV and PHEV models in Europe, is not investing in infrastructure.

  • avatar
    oobitsa

    Judging from the three ID4’s with temporary tags that I saw trying (and failing) to charge at an Electrify America station this weekend, I think this is probably a good idea. It’s a huge station and, over the course of the last two years, I’ve never seen any cars charging there.

    • 0 avatar
      Tim Healey

      I don’t recall issues with the ID.4 I tested, but I’ve had issues getting EVs to charge at some chargers. Not sure if they were ChargePoint or EA off top of head. Regardless, chargers that work smoothly with almost no errors are part of what we need if the market is to truly shift favorably towards EVs.

  • avatar
    slavuta

    I still don’t understand the problem these companies are trying to solve

    • 0 avatar
      EBFlex

      Who can be the most virtuous. Who can make the most EV crap to show how hip and cool they are.

      • 0 avatar
        FreedMike

        In other words, they’re making stuff you don’t find hip and cool, so it’s “virtue signaling.” Now, if they were making some SUV that was about the size of a US Navy cruiser, you would be all for it.

        Blah blah blah blah blah

  • avatar
    SCE to AUX

    I don’t understand why VW would back out of EA, and I’m confused because I thought EA was their baby to begin with.

    One area where Tesla quality is head and shoulders above everyone else is the Supercharger network. Nearly all of their stations earn a 10/10 rating, but other brands are designed by committee and it shows in their spotty ratings.

    • 0 avatar
      ToolGuy

      VW was pushed into creating Electrify America (see link), so of course they are going to back away as soon as possible (see quote).

      https://en.wikipedia.org/wiki/Electrify_America

      “Those convinced against their will are of the same opinion still.”

      The EV charging business is strange:
      a) The investment happens immediately and in huge chunks [with 100% certainty]
      b) The maintenance headaches go on forever [with 99.875% certainty]
      c) The income is received in tiny little dribbles over a long time period with many associated hassles [with high uncertainty due to numerous factors*]

      *Examples of uncertainty of getting any significant revenue:
      0) Incompatible charging standards mean your charger network only works with some vehicles; some of the vehicles your charger network is compatible with might sell very well and some might not; charging standards could change over time making some of your chargers effectively obsolete
      1) Location of your chargers might be right and might be wrong; could be right now and wrong later when battery ‘breakthrough’ results in low charging rates at a given location; traffic patterns might (will) change over the life of the charger
      2) The payment chain from the customer to you is tenuous and lined with potential middlepersons

      [~80% of charging revenue will be generated from ~20% of charging stations – choose carefully]

      Turns out that VW (while sometimes doing stupid things) are not stupid – they already figured out that 10 years is 120 months:
      https://www.electrifyamerica.com/our-plan/

      • 0 avatar
        ToolGuy

        @SCE to AUX, to your point, Tesla’s approach mitigates some of the concerns of running a charging network (the standard is -our- standard, the customers are -our- customers, the payment flow is cleaner).

      • 0 avatar
        ToolGuy

        Ford offers “more electric vehicle public charging stations in North America than any other automaker” – this is a big deal to them [Jim Farley has made it a point].
        https://media.ford.com/content/fordmedia/fna/us/en/news/2019/10/17/ford-introduces-north-americas-largest-electric-vehicle-charting-network.html

        Note the many footnotes. [Side note: Contrast the carefully-parsed language in the “About Ford Motor Company” section of that press release (“Ford designs, manufactures, markets and services a full line of connected, increasingly electrified passenger and commercial vehicles: Ford trucks, utility vehicles, vans and cars, and Lincoln luxury vehicles.”) with the “CARS” section of the ford.com website (i.e., “cars” = old Mustang only). Also note the carefully-worded treatment of Lincoln’s vehicle offerings (only utilities now).]

        Here are “some of the charging partners” used to get them to that number:
        https://owner.ford.com/support/how-tos/ev/what-is-the-ev-fordpass-charging-network.html

        “roaming†”? That sounds exciting. (It will be messy in use and even messier to track the revenue back to Dearborn.)

        Bonus:
        “†Through roaming, Ford customers will be able to access and pay for charge sessions at chargers operated by the listed charging networks as well as other charging networks you’ll find in the FordPass App or Mach-E in-vehicle screen as “In-network” chargers.”

        “In-network” chargers? Driving: Now as convenient as your HMO. :-)

    • 0 avatar
      Scoutdude

      They aren’t backing out they are looking for an investor to inject some cash since EV charging is decades away from being a profitable business. That and I suspect they are finding out that the build out is more expensive than they originally thought.

  • avatar
    SCE to AUX

    @ToolGuy, Scoutdude:

    You both make good points about the business model. There is a perverse irony at play:

    1. In the new beginning (~2011), EVs had short range and no meaningful charging network – just when they needed it most.

    2. Today, with long-range EVs, charging networks are almost plentiful (not necessarily reliable…), but a long-range EV is still used primarily for daily driving and is charged at home.

    So making a profit on a charging network may become increasingly difficult to do. An analogy would be: imagine trying to make a profit by adding double the number of gas stations in a region.

  • avatar
    mcs

    It looks like Tesla might be opening it’s network up to other companies. That could be the reason.

    • 0 avatar
      mcs

      So yeah, here’s why…

      https://electrek.co/2021/06/24/tesla-confirms-plan-open-supercharger-network-other-automakers-next-year/

      • 0 avatar
        ToolGuy

        That article references Norway (and then electrek jumps to conclusions).

        Meanwhile, VW’s plans are not a mystery. They are executing the plan, which called for things to get fuzzy right about now. Read the link:
        https://www.electrifyamerica.com/our-plan/

        [The first paragraph under Cycle 4 references Cycles 3 and 4, which indicates that even the webpage proofreaders are struggling with the fuzziness.]

        $800 million over 10 years as agreed and they are gone – they want no part of it as an ongoing business.

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