Volkswagen is paring back the budget for PowerCo under its new five-year program. Handelsblatt reports that funding will drop to a low single-digit billions of euros, down from the originally planned €15 billion. The company confirms that expanding production capacity will be stretched over a longer timeline and scaled down in size, citing slower-than-expected growth of the electric-vehicle market in Europe and North America. The move looks less like a retreat and more like a pragmatic recalibration to match demand.

The group is weighing outside investment, joint ventures, and government support. Even with slimmer spending, PowerCo will begin producing its first unified battery cell in December at the Salzgitter plant. This cell is slated for future electric models from Volkswagen, Skoda, and Cupra. While the 2021 roadmap envisioned six PowerCo factories, only three will go ahead—for Germany, Spain, and Canada—and with reduced required capacity through the end of the decade. In essence, the technology track remains intact, but capital intensity is being dialed back.

PowerCo continues to post substantial losses, exceeding last year’s levels, and total investments have already surpassed €2.5 billion. Final budget decisions are set to be taken at a VW supervisory board meeting, where updates on future models are also expected. Overall, the episode underlines how the shift to electric mobility is proving more complex than planned, despite the ongoing push in technology and the promise of upcoming products—a more cautious rhythm that fits the market’s current pace.