Lyra Martin Auto 06.28.2022 13:Jun PM EDT

Volkswagen Sold Siemens a $2.45 Billion Stake in Electrify America

Volkswagen sold Siemens a tiny share of Electrify America for $2.45 billion. The two companies intend to invest in adding Electrify America charging stations by 2026.

Electrify America's charging network will double in the next four years. The company is also building human-centered charging featuring a lounge-like waiting area and solar panel awnings.

VW, Siemens to Boost EA Charging Stations in US and Canada by 2026

In a transaction that valued the business at $2.45 billion, Volkswagen sold a small portion of its ownership in Electrify America, its electric car charging operation, to Siemens. By 2026, the two businesses want to increase the number of Electrify America charging stations in the US and Canada by spending $450 million together. (The Wall Street Journal reported the story first.)

The announcement coincides with a surge in electronic vehicle sales in the US. However, these sales still account for a small portion of total auto sales. It also coincides with the Biden administration's ambition to construct 500,000 EV chargers by 2030, supported by $5 billion in funds from the president's infrastructure plan.

Utilizing finances authorized as a part of the bipartisan infrastructure measure adopted last year, the Biden administration unveiled a five-year, $5 billion plan to strengthen the country's patchy electric car charging infrastructure.

The grants are part of a larger initiative by President Biden's administration to tackle climate change and cut carbon emissions. Despite an increase in EV sales over the last few years, the transportation sector still accounts for at least 25% of all carbon emissions, the majority of which are tailpipe emissions.

The success of that strategy will depend heavily on investments made by commercial partners, such as VW's Electrify America, which as of March 2022, operated more than 730 charging stations and more than 2,438 individual charging units. Those partners will also need allies to share the astronomical expenses associated with creating a charging network from the start.

Depending on the location, installing a DC fast charger that can provide up to 350kW of electricity might cost up to $250,000.

Siemens' minority investment in Electrify America represents "a low triple-digit million USD investment," according to the businesses, who declined to provide the precise sum. They will also give the German firm a seat on the board of directors of Electrify America.

As Electrify America's first outside investor, Siemens will build 1 million EV chargers in the US. VW created the firm following Dieselgate when the manufacturer allegedly rigged government air quality tests.

VW Says Electrify America will Have 1,800 Stations, 10,000 Fast Chargers by 2026

By 2026, Electrify America's charging network will have more than quadrupled, reaching 1,800 locations and 10,000 fast chargers, according to VW. The business is also constructing several new "human-centered" charging stations in California and New York, each with a waiting space that resembles a lounge and awnings made of solar panels.

The business is also releasing a smaller EV charger to improve the consumer experience. Santa Barbara, San Francisco, San Diego, Beverly Hills, Manhattan, and Brooklyn in New York City will get new multi-charger stations in 2022 and 2023.

EV charging in the US is challenging and very dispersed for those who don't own a Tesla. Over 100,000 outlets may be found nationwide at 41,000 public charging stations. It might be challenging to locate one that truly works or isn't locked within a guarded parking garage, for instance.