The News: Volkswagen recently sold a minority stake in Electrify America to Siemens. Electrify America is Volkswagen’s electric charging subsidiary and, according to details of the deal, Siemens and Volkswagen are investing $450 million jointly in Electrify America. The company is now valued at $2.65 billion. Siemens and Volkswagen are aiming to greatly expand the number of Electrify America charging stations within the United States and Canada. Read more about the announcement in The Wall Street Journal.
Siemens and Volkswagen Investing $450 Million Jointly in Electrify America
Analyst Take: The news of Siemens’ investment in Electrify America charging stations comes at a critical moment for electric vehicles. Sales of EVs are rising as the Biden administration’s infrastructure plan aims to build half a million charging stations across the country by 2030. With Siemens and Volkswagen jointly investing $450 million in Electrify America, they are well positioned to capitalize on what promises to be a rapid expansion for EV charging stations in general, and Electrify America charging stations in particular.
This is more than simply an opportunistic investment for Siemens, the German manufacturing giant; even a company on the scale of Volkswagen requires outside investment to make projects like building Electrify America charging stations en masse possible. Installation costs of Electrify America charging stations can cost in the ballpark of $250,000 depending on location. This puts a price tag of up to $180 million on Electrify America’s current charging stations in installation costs alone, to say nothing of the price of materials or maintenance.
With such heavy costs for installing new Electrify America charging stations, it is not surprising that Volkswagen would take on an investor such as Siemens. Not only does Siemens have the raw capital to make substantial investments into Electrify America charging stations, the value Siemens can contribute in terms of technology expertise, logistics, and engineering talent is considerable.
EVs are the future for a world focused on sustainability. I’m encouraged to see this partnership between Siemens and Volkswagen and excited by what this ultimately means for the rapid expansion of EV charging stations in the U.S.
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Image Credit: Volkswagen