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.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
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Image Credit: Volkswagen
Shelly Kramer is a Principal Analyst and Founding Partner at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation. She brings 20 years' experience as a brand strategist to her work at Futurum, and has deep experience helping global companies with marketing challenges, GTM strategies, messaging development, and driving strategy and digital transformation for B2B brands across multiple verticals. Shelly's coverage areas include Collaboration/CX/SaaS, platforms, ESG, and Cybersecurity, as well as topics and trends related to the Future of Work, the transformation of the workplace and how people and technology are driving that transformation. A transplanted New Yorker, she has learned to love life in the Midwest, and has firsthand experience that some of the most innovative minds and most successful companies in the world also happen to live in “flyover country.”