Volkswagen Group subsidiary Electrify America said Tuesday it raised $450 million in a deal that includes its first external investor as it aims to accelerate its rollout of ultra-fast charging stations in the U.S. and Canada.
The deal, which values North America’s largest ultra-fast EV charging network at $2.45 billion, includes more than $100 million from German industrial company Siemens and additional capital from VW Group.
The money will help Electrify America toward its goal of more than doubling its footprint to 10,000 ultra-fast chargers across 1,800 charging stations in both countries by 2026. The company currently operates 3,500 ultra-fast chargers at 800 stations.
Siemens, now a minority shareholder with a seat on the board, will invest “a low triple-digit USD amount” as the charging company’s first outside investor, Electrify America said.
Meanwhile, Volkswagen said it plans to increase its capital investment in Electrify America beyond its original commitment of $2 billion through 2026. A VW spokesman described the amount as “an incremental investment” but declined to provide details.
The new investment comes at a precarious time for automakers trying to sell EVs. The lack of charging stations is one of the main bottlenecks to the mass adoption of electric vehicles.
The challenge is especially dire in the U.S., which “requires a six-fold increase in average annual public charging installations over the next four years” to meet federal benchmarks, according to the 2022 Bloomberg Intelligence Global Battery-Electric Vehicles Outlook released in June.
“A big push is needed to scale up the industry quick enough so charging infrastructure is installed in time to support the expected electric vehicle fleet,” the report said.
The sector has picked up steam since President Joe Biden signed an infrastructure bill in November earmarking $7.5 billion for a national network of half a million EV chargers, which many established and startup EV charging companies have been scaling and consolidating operations.