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Volkswagen plans Porsche IPO amid EV push

Yahoo Finance’s Pras Subramanian joins the Live show to discuss Volkswagen’s plans to float Porsche in what could be the largest IPO in German history.

Video Transcript

JULIE HYMAN: Well, now we got to talk about something else that's going on.

BRIAN SOZZI: Yeah, let's get on to Volkswagen. Volkswagen has announced its intention to float luxury car brand Porsche. It could become the largest IPO in German history. Yahoo Finance's Pras Subramanian has the details. Pras.

PRAS SUBRAMANIAN: Hey, Soz. So there's some kind of, like, relief that this is going to happen. There was some concern because the market conditions at the IPO will be delayed. But Porsche [INAUDIBLE] following that intention to float their IPO here.

It's going to probably happen in September or early October. They're going to float around 25% of the company in this preferred nonvoting share class. This allows the Porsche and Piech families to maintain control of the company going forward. Reuters says that Porsche is seeking a valuation of $60 to $85 billion.

It, like you said, would make it Germany's biggest IPO ever. You know, Porsche's a moneymaker for [? both ?] [INAUDIBLE], right? Its operating profits up 22% versus a year ago. Very high margins there. They're doing quite well for the actual-- for VW. And this money, where is it going to go?

It's going to go to actually be-- try to transfer the brand to introduce more EVs as it goes fully electric. So you know, Porsche wants 80% of those sales to be EVs by 2030, so they have a long way to go. But also, they need a lot of money to make that transformation happen.

JULIE HYMAN: And so when we look at that transformation, what does it look like? What is Porsche doing when it comes to electric vehicles?

PRAS SUBRAMANIAN: So the Taycan EV has been a pretty big hit for the brand so far. It's actually outselling the 911, believe it or not, as of right now. So they've been doing quite well with that Taycan. But they really need to go into the crossover and SEV space, and that's what the Macan EV will be addressing, that market.

That's their number one seller too, is the Macan EV, so they need to get that out. 2025-ish is the deadline. There's been some concern because of problems with the software. This is why VW's outgoing CEO Herbert Diess lost his job, is because they had problems with the EV software.

And then Porsche's CEO Oliver Blume was tapped to become the new CEO because he's going to try to fix that, right that ship, with regards to the EV software. So the whole brand as well as VW portfolio can actually go electric too.

BRIAN SOZZI: Pras Subramanian, thanks so much.