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Volkswagen now targets about 50% of total sales by 2030 to come from all-electric vehicles.
Jens Schlueter / Getty Images
Return to what investors think
Volkswagen
it’s nothing amazing.
Shares of Volkswagen (ticker: VOW. Germany), which enters on Thursday, gained 39% per week and over 70% in the last month. These are electric vehicle returns.
adze
(TSLA), for example, gained about 60% in the pre-acquisition period for
S&P 500
in December.
EV investors are prepared for such stock moves, but huge short-term gains and losses are not as common in the traditional automotive sector.
What has changed at Volkswagen, to move its stock, is its electrification goals. The German carmaker now aims for about 50% of total sales by 2030, coming from fully electric vehicles. The company’s previous goal was to penetrate about 25% of existing sales by 2030.
To make those numbers, Volkswagen also announced plans this week to build six battery plants. The targets are bold and could translate into 5 million or 6 million electric vehicles annually by 2030 – about half of the 10 million to 11 million the company produces. Tesla, for context, delivered about 500,000 electric vehicles in 2020.
Investors are clearly excited about the change of Volkswagen. Apparently, it only takes a few days to turn from a traditional car manufacturer into an EV player.
For EV bulls, it may be ironic that Volkswagen’s stock has increased by about 40% after the announcement of the battery factories. And in the days following Tesla’s battery technology day in September, which also unveiled plans for internal battery production, its stock fell by about 8%.
But the stock market is about expectations as well as valuations. Few expected Volkswagen to essentially double the planned battery power. Tesla, on the other hand, expects it to grow by 50% or more each year for the foreseeable future – and expectations haven’t changed in a while.
Tesla is also valued at sales about 6 times estimated for 2025. Volkswagen is valued at sales about 0.5 times estimated for 2025. The potential of VW shares is high if the company can even become a second fiddler for Tesla.
Tesla shares that came in on Thursday rose about 1% for the week, slightly better than S&P, and
Dow Jones Industrial Average.
Investors don’t seem to think that more Volkswagen electric vehicles mean bad things to Tesla. It just means more electric vehicles for everyone, as well as fewer gasoline cars.
As for Volkswagen, some of the air went out of stock on Thursday. Shares fell by more than 14% in trading abroad.
Write to Al Root at [email protected]