Volkswagen Stocks Rise After ‘Power Day’ Event & EV Move

Source: Hrecheniuk Oleksii, Shutterstock

Summary

• Stocks of German automotive giant Volkswagen AG (ETR: VOW3) rose by about six per cent on Tuesday, March 16.
• The latest spike brought its year-to-date (YTD) growth to over 36 per cent.
• Volkswagen saw its stock price shoot up on Tuesday after two vital corporate announcements on Monday and Tuesday.

Stocks of German automotive giant Volkswagen AG (ETR: VOW3) rose by about six per cent on Tuesday, March 16, bringing its year-to-date (YTD) growth to over 36 per cent. The stock jumped by more than eight per cent in the last five days and has returned over 113 per cent in the last one year.

What has fueled its recent stock price spike? Let’s find out.

Volkswagen AG (ETR:VOW3)

Volkswagen saw its stock price shoot up on Tuesday after it held its first 'Power Day' event on Monday, March 15, which reminded many of rival Tesla Inc ‘Battery Day’ event. The stock rose further as the German auto giant disclosed 2020 sales figures on Tuesday.

©Kalkine Group 2021

In its annual report, Volkswagen revealed that it sold 231,600 units of all-electric vehicles in 2020. Although the sales figure remains less than half of Tesla’s, the company noted that it “tripled its sales” EVs last year. The company also forecast that battery-powered EVs will account for 20 per cent of Volkswagen's total fleet by 2025.

During its Power Day event, Volkswagen laid out its plans to build six new EV battery factories in Europe by 2030.  

The German carmaker also plans to sell about a million EVs in 2021 and offer about offering 50 BEV models till 2030.

©Kalkine Group 2021

Volkswagen added that is working with software firm ARGO AI on autonomous driving technology. It also aims to achieve a return on sales of about seven to eight per cent and generate a €10 billion clean cash flow by 2025. 

Volkswagen Financials

Volkswagen declared an unchanged dividend of €4.8 per ordinary share and that of €4.86 per preferred share in its 2020 annual report.

Its annual revenue slipped 11.8 per cent year-over-year (YoY) to €222.9 billion in 2020. The company ended the year with an operating profit (before special items) of €10.6 billion, registering a dip of 45 per cent YoY.

Volkswagen noted in its latest financial report that its earnings attributable to shareholders amounted to €8.3 billion in 2020. 

Volkswagen’s plans, especially for the expanding electric vehicle market, appears to be ambitious. Being dubbed as Tesla’s potential rival by many reports, it will be interesting to see how this and the next few years pans out for this German automaker.