Volkswagen Plans Green-Power Alternative to Tesla’s Energy Push

Volkswagen AG is setting up its own charging and electricity unit in a bid to make the German manufacturer’s upcoming battery-powered cars more attractive to buyers.

Elli Group GmbH will supply households with renewable power and charging systems, and offer infrastructure for offices and shopping centers. Elli’s portfolio will take shape over the course of this year, with the launch timed to coincide with the rollout of VW’s I.D. electric-car line in 2020.

Key Insights

European automakers need to step up their game to boost tepid uptake of electric cars to comply with more stringent regulations for carbon-dioxide emissions. The European Union agreed on yet tighter caps from 2030 in December, which will likely prod Volkswagen to top up its electric-car spending plan. With the new unit, Volkswagen is challenging Tesla Inc.’s push into energy services. The California company, which has its own network for Superchargers, also offers solar panels and energy storage equipment for homes. Patchy charging infrastructure remains one of the key obstacles to selling more electric vehicles that can take hours to charge. Even among the new crop of battery cars set to be unveiled this year and next, most can’t drive much more than 300 miles on a full battery. German automakers are changing their stance on building more of the infrastructure. Ionity, a joint venture between Volkswagen, Daimler AG, Ford Motor Co. and BMW AG, promises to have 400 stations cross Europe by 2020, but has only about 37 stations operable currently.