Volkswagen AG has decided to postpone the planned initial public offering (IPO) of its battery unit PowerCo on Jan. 30, a decision that reflects the slowing market demand for electric vehicles and the serious challenges facing the automotive industry as it transitions.

Volkswagen's talks to seek outside investors have also slowed because of market doubts about its ability to mass-produce batteries. Vw is no longer prioritising a stake sale or listing its PowerCo business for at least this year and next, according to people familiar with the matter.

Volkswagen's preferred shares fell as much as 1% on the news. Over the past year, Volkswagen shares have fallen 1.9 percent, reducing its market value to about 64 billion euros ($69.3 billion). Due to rising interest rates, the IPO market in 2023 had its worst year in more than a decade. Still, people familiar with the matter said Volkswagen could go ahead with the IPO plan if market conditions improve. In a statement, Volkswagen said it was still preparing for "investments for 2024 and beyond."

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