VW wants to make Porsche public to play Tesla catch up

Volkswagen has drawn one step closer to listing Porsche on the stock exchange, drafting a preliminary agreement between itself and the controlling shareholder: the Porsche-Piëch family.

If seen through, a Porsche IPO (initial public offering) could be one of Germany’s biggest listings.

Analysts estimate Porsche’s value to be between €80bn and €90bn (NZ$130bn to $150bn). VW plans to raise roughly €20bn by floating about a quarter of Porsche’s stock.

Porsche and Audi are VW’s biggest profit makers, both of which have made inroads in the world of electric sports cars with the Porsche Taycan and Audi e-tron. Last year, Porsche sold more Taycans than 911s, and the Taycan is the brand’s biggest-selling non-SUV model.

VW hopes listing Porsche will revive a share price that has slumped behind Tesla and give life to their own EV effort.

The Financial Times describes the situation as a “win-win” but questions whether VW needs the extra cash. VW already rakes in more than €15bn even after their EV investments. Listing Porsche would just strengthen its armoury in the EV weapons race.

It shows how much of a giant Tesla is in the EV world. The marque has sprinted away, leaving their competitors in the dust. Ford and GM, both of who are reportedly worth less than Tesla combined, have pledged to invest billions in EV technology merely to play catch up. 

While not an entirely similar boat, it’s clear VW wants to achieve the success Tesla has and will go to lengthy measures to give themselves a realistic shot.

Porsche won’t be the first luxury car brand to find itself on the stock exchange. In 2015, Ferrari went public and was an initial hit with investors.

Of course, nothing is set in stone right now. VW says they and Porsche have to agree to the terms before going public. But if it does, we can only watch with interest in how VW handles its EV future.