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The cost point on a Volkswagen electric car.
Liesa Johannssen-Koppitz / Bloomberg
Volkswagen
to be a leader in electric vehicles worldwide. He is not content to play Pepsi to Tesla’s
Coca-Cola.
The German automation giant explained updated EV intentions over the past two days, at an investment event and a shareholders meeting.
Volkswagen
(ticker: VOW.Germany) EV’s big goals have always been, but the company is doubling down on the future of electronic personal transportation.
In particular, the company announced plans to build six gigafactories by 2030. Gigafactory has become an industry jargon for a battery center, thanks to
Tesla
(TSLA). Gigafactory is what Tesla calls Nevada’s massive battery facility built by it
Panasonic
(6752.Japan).
Volkswagen battery plants should be able to produce 240 gigawatt hours of batteries per year. Giga is short for billions, but what investors need to know is that level of power generation capacity can be, in the main, four to five million EVs per year.
Battery plants are becoming the new engine plants in the automotive industry.
Volkswagen will, of course, continue to purchase batteries for the existing industry, and the company also has a large investment
QuantumScape
(QS). Quantum is launching solid-state batteries, a lithium anode that promises lower charges, better safety, longer ranges, and faster charging times than today’s EV lithium-ion battery technology.
VW, for context, delivered around 11 million vehicles in 2019, the year before the pandemic hit industry sales. In 2020, Volkswagen sold approximately 230,000 electric vehicles and more than 400,000 electric vehicles, including hybrids and hybrid plug-in options. Tesla sold about 500,000 EVs in 2020.
Wall Street Projects Tesla will deliver about 840,000 EVs in 2021. Volkswagen aims to sell 1 million electric vehicles this year. Volkswagen also doubled its target for European EV sales by 2030. The German automaker wants 70% of European sales by then to be electric vehicles, double the previous target of 35%.
“By 2030, we expect 50% [battery-electric vehicle] share in our global deliverables, ”said Chief Herbert Diess in his Tuesday address to shareholders. “In Europe we expect around 60 per cent. ”
He is very ambitious. Falling costs will help the company get there. Volkswagen also estimates that it will reduce battery charge by about 50% between now and 2030, but the full charge level has not been released. Batteries are a big part of the total cost of an EV, so a 50% reduction would go a long way in making the price of an EV sticker the equivalent of a gasoline-powered car.
The death story for Tesla is no longer a competition though. It is, more likely, the death knell for gasoline powered cars, however. “VW Power Day confirms EVs are ready to become the standard,” Baird analyst Ben Kallo wrote in a survey report Monday. Kallo covers Tesla, not Volkswagen, and sees the VW event as a sign that EV’s entry into the overall auto market is going faster than investors currently expect. He expects Tesla, however, to remain a leader.
Kallo ranks Tesla Buy stock and has a $ 736 price target for shares. Wedbush analyst Dan Ives covers Tesla, not VW, as well. It rates Tesla Hold shares. Ives ’price target, however, is higher than Kallo’s at $ 950 per share.
Ives gets a question from his clients about whether new competition is the reason Tesla stock was recently sold. Tesla shares have fallen 21% from their January high. His response is emphatic or.
“The EV party is just getting started,” Ives wrote. Higher interest rates have affected EV’s high growth segment, but not worryingly. “The…. transformation is just beginning as this industry is close to a $ 5 trillion market opportunity over the next decade. ”That huge number, but achievable, is considering global automated sales. easily over $ 2 trillion per year.
That’s plenty of room for many winners and losers: both VW and Tesla can succeed.
Write to Al Root at [email protected]