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According to the defined targets set by Volkswagen, the company expects to deliver more than 450,000 electric vehicles (EVs) in 2021.
The shares of German automaker Volkswagen Group (OTCMKTS: VWAGY) are seeing brighter days in the stock market on optimism that the firm is set to out-compete the likes of Tesla Inc (NASDAQ: TSLA) in the electric vehicle (EV) production race. The shares yesterday were exchanging hands at over $42, up more than 29%. However, after hours they lost 8% oftheir value.
The recent performance of the automaker has positioned it as the most valuable company in Germany, outpacing software firm SAP SE (NYSE: SAP). At present, Volkswagen’s market cap is €142 billion ($169 billion), against that of SAP which is pegged at $152.75 billion at the time of writing.
The bulk of the growth performance of Volkswagen shares was concentrated over the past one month following its “Power Day,” an event that is comparable to Tesla’s “Battery Day,” through which the company made known its plans to push serious investments into battery cell production.
While competing auto brands like the General Motors Company (NYSE: GM), and Ford Motor Company (NYSE: F) have benefitted from previously announced EV plans, market observers and the investors’ actions are suggesting that it is Volkswagen’s turn. The shares of the German automaker have surged by about 100% in the past six months, and by more than 25% since the start of the week.
Volkswagen Shares Pumped after the Firm Reveals It Will Produce Its Own Batteries
According to a report by Electrek, Volkswagen shocked the Korean battery makers LG Energy Solution and SK Innovation this week by informing them they will be using their own batteries going forward, a move that was first pioneered by Tesla. Per people close to the matter, the dependence on its own battery cells will begin in the next two years.
EV automakers over time have had the ultimate challenge of producing auto cars with efficient battery cells at a relatively reduced cost. The economic challenge of manufacturing such batteries at a cheap price accounts for why most electric vehicles are highly-priced, compared to cars powered with petrol.
The plans by Volkswagen to make its own batteries have significant cost implications, but the firm appears ready to take on this challenge. While the company’s EV products, the VW ID.3 and ID.4 have received a lot of acclaim in the market, there is a clamor for the firm to double up on its production capacity, a target that is on track to be achieved this year.
Ramping up Production to Compete Globally
According to the defined targets set by Volkswagen, the company said on Wednesday that it expects to deliver more than 450,000 electric vehicles (EVs) in 2021. The firm has a target to produce about 3 million EVs by 2025.
Scaling production to capture a fair share of the growing global EV market is at the forefront of Volkswagen, as well as other auto brands. Ramping up production, boosted by a potential decrease in electric vehicle price compared to the market average will be key to success for the company amongst the growing competition.