The Porsche IPO Isn’t happening Just Yet

Porsche’s IPO plans have been put on the back burner for now, however, should it be offered in the future, the German Marques valuation might exceed that of its parent VW

If there’s one brand that’s catapulted EV ambitions within the Volkswagen Group, it has to be Porsche. While Audi may have been the first to bring their e-Tron to market, it wasn’t until the Taycan came along that several brands within the VW Group started making the shift to electric mobility.

A Porsche IPO Isn’t Happening Any Time Soon

The Porsche IPO Isn't happening Just Yet
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Looks like the VW Group has a monumental task ahead of itself and Porsche might help lead the way in getting there quicker

Speculation is rife that the Volkswagen subsidiary may go public. In recent days, talks regarding an IPO of Volkswagen subsidiary Porsche AG have increased once again, boosting VW’s share price. According to media reports, Volkswagen has the investment firms Goldman Sachs and Freshfields to prepare the IPO for Porsche. Having said that, the plan for an IPO may still be some time away considering that automakers the world over are still having to contend with the shortage of semiconductors.

The Porsche IPO Isn't happening Just Yet
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Back in February, there was speculation that German sportscar maker Porsche could be spun off as an independent entity by raising an IPO

As per a Bloomberg report, the German sports carmaker is currently valued at 99 billion euros, which is close to its parent company valued at 122 billion euros. However, should a Porsche IPO come through industry experts estimate that its valuation should surpass that of its parent company, i.e the VW Group.

“We think we are well organized now in the premium sector, this is working for us quite well now. We don’t sell any of the other assets currently,” - CEO Herbert Diess told reporters last Thursday post Volkswagen's release of its third-quarter earnings results.

A Sustainable Strategy for the VW Group

The Porsche IPO Isn't happening Just Yet
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In the most recent developments, it has also come to light that the VW Group has hired Goldman Sacs as well as Freshfields to prepare for an IPO

Porsche is the VW group’s sports car business, is the Wolfsburg-based group’s second-largest profit earner, after only Audi. Porsche is also the most well-known sports car brand in the world, which may bring an additional premium to the stock market. However, the truth is that a lot has happened at the VW Group since the Piëch period. The initial ideas, which included commercial cars and high-end brands such as Bugatti and even Bentley under one roof, will no longer be viable in the future.

The Porsche IPO Isn't happening Just Yet
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However, VW Group CEO Herbert Diess told reporters that a Porsche IPO isn’t happening anytime soon

Experts in the automotive industry, such as Ferdinand Dudenhöffer, believe that an IPO of Porsche is a genuine possibility. Above all, the high valuations of companies like Tesla, but also Chinese start-ups like Nio and Xpeng, are tempting. As an independent publicly-traded company, Porsche would have greater flexibility of movement and the potential to create additional value.

The Porsche IPO Isn't happening Just Yet
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A lot has transpired in the automotive industry since the Piëch period and the strategy of having high end brands like Bentley, Bugatti & even Porsche might not be sustainable moving forward

Furthermore, VW requires funds for future investments in electro-mobility and driverless technology. Several upcoming models from the German marque are due to go electric. Coming back to Porsche itself, a new all-electric Macan, is round the corner, as are models like the Cayman 718, which is also due to ditch combustion engines.

What’s Next For Porsche?

The Porsche IPO Isn't happening Just Yet
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The Cayenne & Panamera have been offered with the option of a hybrid powertrain, but expect those models to soon transition to electric as well. The iconic 911 may be the last of the bunch to make the switch to electric. The VW group aims to surpass Tesla as the world’s largest EV maker by as early as the middle of this decade.

The Porsche IPO Isn't happening Just Yet
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And the recent Rimac Bugatti merger might also help expedite the process and transition to electric

But to give you some perspective, this post by Observer sums up the current situation, best. The German automaker sold 16 times more cars than Tesla, however, it only has 1/10th the valuation of the Californian EV maker, which recently entered the $1 Trillion dollar club. VW sure does have a monumental task ahead of itself and Porsche could help lead the way. Its recent merger with Bugatti Rimac will only further expedite the process.

Source: Bloomberg

Khris Bharath
Khris Bharath
Khris is a classic car aficionado and adores his Jags and Alfas, although he keeps tabs on everything from super exotics like an old EB 110 to the latest from Lucid. Formula One is very close to his heart, and he diligently makes time to tune in for the Grand Prix on Sundays. Khris also loves his road trips and he prefers stick shift over an Auto any day.  Read full bio
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