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Summary
- In the last three days, Volkswagen’s stocks grew up by 18 per cent
- The latest surge brought its year-to-date growth to 54 per cent.
- Volkswagen is Europe's largest seller of electric vehicles.
Tesla (NASDAQ:TSLA) surely knows how to disrupt an industry, thanks to Elon Musk's decisions and innovative approach. However, it may not be long that Tesla begins to feel what disruption means.
Wondering why we say this?
Market experts are predicting that Volkswagen (ETR: VOW3) could easily match Tesla sales by 2022 and may even sell three lakh electric vehicles (EVs) units more.
Bloomberg in its recent article referred to Volkswagen (VW) boss Herbert Diess is the 'TechnoKaiser' and now it seems they were right!
'Kaiser' in German means emperor and early predictions indicate that VW is going to give a tough competition to the present king of electric vehicles, Mr Musk.
Recently, Mr Diess announced big EV plans for the automaker and indicated its transformation into an EV giant. While the company's plans focus majorly on Europe, it will still have global implications, especially on entities that are already in EV business or which are planning to enter this sector.
To put this in simple words, this is an important update for investors who are holding onto EV stocks.
Big plans will boost stocks?
The German auto giant plans to build six new battery factories, popularly referred to as a ‘gigafactory’. This will enable VW to produce 240-gigawatt hours of batteries every year.
For investors, this means that the company's manufacturing capacity will increase to four-five million EVs annually. It is expected that the company's 70 per cent sales will be from electrified cars, both all-electric and hybrid.
In the last three days, VW's US-listed depository stocks grew up by 18 per cent and 54 per cent year-to-date. It seems that the investors are thrilled by the announcements made by Mr Diess. The scrips were priced at US$ 279 apiece at market close on March 17.
The automaker declared an unchanged dividend of €4.8 per ordinary share and €4.86 for preferred share in 2020.
@Kalkine Image 2021
Why it is being dubbed as a rival to Tesla?
With the help of ‘gigafactories’, the company can cut down the cost of EV batteries. It can also improve its battery efficiency in comparison to that of Tesla.
In 2020, Tesla sold fewer than five lakh electric vehicles and took a 16 per cent share of the global market. VW's figure stood at 4.22 million, roughly 13 per cent of the global market share.
What’s worth noting is that the German automaker sold more electric vehicles than Tesla in the fourth quarter. The former sold 1,91,000 EVs while the latter's sales were 1,83,000 units.
Thanks to electric vehicles like VW ID.3 and Audi e-tron, Volkswagen's credibility has improved by leaps and bounds, making it Europe's largest seller of electric vehicles. This means it can give tough global competition to Tesla in the coming years.
