Varta and Porsche talk about investing in electric vehicles batteries.
sports car manufacturer Porsche may want to buy the electric car battery business from the struggling battery company Varta. The company is in negotiations withPorsche about a possible majority investment in the Varta subsidiary V4Drive, Varta announced last night in Ellwangen.
The companies have already signed a non-binding letter of intent. First, the Varta subsidiary will be spun off. In a second step, the Volkswagen Group subsidiary Porsche will participate via a capital increase. Varta did not provide any financial details.
Whether the deal will go ahead depends on various factors, including a thorough review of the books by Porsche. Nevertheless, the news caused Varta shares to soar on the stock market: the shares shot up by 32.2 percent to 11.76 euros on Friday morning.
Since the beginning of the year, Varta shares have fallen by around 57 percent. If a deal does actually come about in the end, this would certainly be a financial relief for Varta, commented capital market expert Jürgen Molnar from RoboMarkets.
Varta has been in crisis for a long time
The battery company has been in crisis for some time now because business is no longer running smoothly. Demand for small lithium-ion button cells, for example for headphones, fluctuates greatly. Varta recently lowered its sales forecast for 2024 due to a further downturn in the energy storage market. The company from Ellwangen in Swabia is now only expecting sales of 820 to 870 million euros. Varta had previously forecast at least 900 million euros.
In addition to button cells for headphones, business with energy storage devices for photovoltaic systems has also recently performed worse than expected. Varta also complained about cheap competition from China and ongoing problems in the supply chains.
To make matters worse, hackers attacked Varta’s computer systems in February and paralyzed production for several weeks.
Porsche plans its own battery production
The electric car battery called V4Drive should open up new business opportunities for the group in electromobility. It had long been speculated that Porsche would be a first customer for Varta’s battery cells. The Zuffenhausen-based company wants to set up its own battery cell production with partners anyway. According to previous information, the sports and off-road vehicle manufacturer plans to set up production with an annual cell capacity of 10 to 20 gigawatt hours in the coming years. This would be enough for 200,000 cars with a battery capacity of 100 kilowatt hours. Porsche sold around 320,000 cars in 2023, but the majority are still combustion engines.
Investments of two to three billion euros are needed for 20 gigawatt hours, it was said. Porsche wants to look for partners for this. It is not yet clear where such cell production would take place. Porsche also wants to work with the battery company PowerCo, owned by the parent company Volkswagen .
The V4Drive lithium-ion cell was presented as a beacon of hope a few years ago. The then Varta boss Herbert Schein presented the battery cell, which was to be installed in cars. But after Varta presented its first customer in late spring 2021, nothing happened at first.
In May, restructuring expert Michael Ostermann was appointed as the new CEO. The group had previously had to admit that its own restructuring concept was no longer sufficient to return to a profitable growth path by the end of 2026 as planned.
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Varta and Porsche talk about investing in electric vehicles batteries. source
