Volkswagen sells stake in Electrify America charging unit – sources

A new logo for German automaker Volkswagen is unveiled at VW headquarters in Wolfsburg, Germany, September 9, 2019. REUTERS / Fabian Bimmer / File Photo

FRANKFURT, July 6 (Reuters) – Volkswagen (VOWG_p.DE) to sell a stake in its Electrify America electric vehicle charging unit, two people familiar with the matter said, as the automaker seeks outside funds to build infrastructure cars.

Volkswagen is working with Citi (CN) to find a co-investor willing to put around $ 1 billion into the division, the sources said, adding that the company is expected to contact infrastructure groups and other potential investors soon.

Volkswagen, Electrify America and Citi declined to comment.

Created in the wake of the Volkswagen emissions fraud scandal that erupted in the United States, Electrify America plans to spend $ 2 billion over the 2017-2026 period to expand electric vehicle (EV) charging stations.

The unit, whose main rivals include ChargePoint (CHPT.N) and Tesla’s Supercharger (TSLA.O), has 635 charging stations with about 2,850 operational fast-charging points, according to its website.

This includes super-fast charging stations of up to 350 kilowatts, allowing owners to charge their cars in under 20 minutes.

The company plans to install or expand around 800 charging stations with around 3,500 fast chargers by December 2021, spanning 45 states, including two cross-country routes. It also operates solar-powered charging stations.

At Volkswagen’s Power Day in March, Electrify America chief executive Giovanni Palazzo, who joined Volkswagen from Daimler (DAIGn.DE) ten years ago, said the group plans to grow further.

Volkswagen, which will present its new strategy on July 13, is currently trying to consolidate its various charging efforts in the Charging & Energy business area led by Elke Temme, a long-time executive at the main German utility RWE (RWEG.DE). Read more

Charging infrastructure has attracted several sectors, including utilities, automakers and major oil companies, in hopes of capitalizing on growing demand for electricity following a global deployment of electric vehicles.

Sources told Reuters last week that Renault (RENA.PA) and Shell (RDSa.L) were both interested in becoming part owners of Ionity, the European electric vehicle charging joint venture owned by BMW (BMWG.DE). Hyundai (005380.KS), Ford (FN), Daimler and VW. Read more

Additional reporting by Ben Klayman; Editing by Nick Macfie

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