That’s why I and almost everyone who follows parent company Volkswagen AG has long argued that the best thing to do is list Porsche separately. After all, VW’s total market capitalization is just over 100 billion euros.

And by jove, it finally looks like it’s going to happen! On Tuesday, VW confirmed advanced talks with Porsche and the Piech family holding company regarding a possible initial public offering of the Porsche automotive business.

With the threat of war in Ukraine and interest rate hikes rocking financial markets, now is not the perfect time to list just any type of business. Important details have yet to be clarified, and there is no guarantee that the transaction will reach the finish line. Yet the fact that we have come to this is a small miracle.

Institutional investors have very little influence at VW. The Porsche/Piech families, the Land of Lower Saxony and the trade unions all decide, and unfortunately they rarely agree. But having amassed an impressive stable of brands over the years, their default position is not to sell them.

Yet even the dinosaurs on VW’s board seem to have realized that the status quo is unsustainable. In the coming decade, VW must completely overhaul its factories and stop relying on combustion engines. With its low valuation, it has one hand tied behind its back. Tesla comes with none of the same baggage and is therefore valued at nearly $900 billion. The stock sale gave Tesla funds to build a German factory in VW’s backyard.

Slow German companies realize they have to change. Daimler AG renamed itself the much sexier Mercedes-Benz Group AG and spun off its truck business last year, for example. Beyond the automotive sector, Siemens AG has shown the way by listing several units separately. Auto parts supplier Continental AG could be next for the breaking treatment.

Listing Porsche is the most important step VW can take to unlock its conglomerate discount. The current setup does not allow VW’s combustion and electric businesses to be separated, as they are so closely linked at the brand level.

It’s unclear why Porsche and VW power brokers are favoring an IPO over a much simpler spin-off. If, as has been reported in the German press, the Porsche and Piech families intend to sell some of their VW shares to acquire a larger stake in Porsche AG (their pride and joy), this could create conflicts interesting interests.

In a separate statement, the family holding company (confusingly called Porsche Automobil Holding SE), said it may acquire ordinary (voting) shares in Porsche’s IPO.

It’s in VW’s interest to get the highest possible value for Porsche, while families theoretically have an interest in buying shares cheaply. They hold a majority stake in VW and have several seats on the board. It helps families that common (voting) shares of VW currently fetch a large premium over the more liquid, non-voting preferred shares.

Given its conservative track record, VW could decide to sell a relatively small stake in Porsche, which could dampen valuation potential. Something similar happened when VW only sold a 10% stake in its Traton SE truck unit in 2019.

Even so, a Porsche IPO would be a huge step forward. Bankers love their Porsches; now they will also be able to buy the shares.

More from Bloomberg Opinion:

• Why does Unilever beat the pack on bad surprises? : Chris Hughes

• If you’re going on holiday this summer, prepare to pay: Andrea Felsted

• Inflation is high if you have pricing power. Just ask Mercedes: Chris Bryant

(1) Porsche generates more than 4 billion euros in annual operating profit. On the back of the envelope I applied a 20x EBIT multiple which is a big discount to where Ferrari trades

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.