Porsche Seeks Partners for a $3.3 Billion EV Battery Plant

Porsche AG is currently in discussions with potential financial and strategic partners to establish an electric-vehicle battery factory, with an estimated cost of up to €3 billion ($3.3 billion).

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The luxury car manufacturer is exploring various locations near Germany, the US, and Canada and will primarily base its decision on factors like competitive electricity prices and the availability of renewable energy. The proposed plant is expected to have a capacity of up to 20 gigawatt-hours.

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Lutz Meschke, Chief Financial Officer of Porsche, emphasized the importance of securing favorable energy costs, which will play a crucial role in the project's success.

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Facing supply-chain challenges in the second half, Porsche is under pressure to accelerate its shift towards electric vehicles, especially after encountering software-related delays in key models, including the battery-powered Macan. Deliveries of their fully electric model, the Taycan, experienced a 5% decline in the first half of the year due to lower parts availability.

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Regarding the location of the battery factory, CEO Oliver Blume highlighted that proximity to Germany may be sensible given that most of Porsche's cars are manufactured there. However, the US is increasingly attractive due to reduced bureaucratic obstacles and assistance outlined in the Inflation Reduction Act.

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Porsche already owns Cellforce, a venture focused on high-performance battery cells, and has invested in a 1.3 GWh factory in southwestern Germany. Additionally, the company purchases cells from third-party suppliers and collaborates with Volkswagen AG's battery unit PowerCo.

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Blume emphasized the importance of flexibility in exploring various battery cell opportunities, given the significant scale-up in electrification. The goal is to ensure the adoption of the right technology to meet the evolving demands of the market.

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