Volkswagen (VWAGY) is speeding up its EV production in Europe, doubling its forecast for the share of battery-powered cars in Europe to 70% by 2030. Volkswagen shares slipped from a multiyear high while Tesla (TSLA), Nio stock and other pure-play EV makers continued to plunge.
The report said Volkswagen expects to deliver more than 1 million EVs a year in Europe alone by then to reach that goal. VW also sees EV sales surging to more than 50% of sales in China and the U.S. in the same time frame.
At the same time, Volkswagen still plans to post an operating profit margin of at least 6% as of 2023, despite the higher costs of making battery-powered cars. VW has also said it plans to invest about 16 billion euros in electrification and digital services up to 2025, further cutting into margins.
To achieve its EV goals, VW expects to roll out at least one new electric vehicle a year over the next few years. The ID.3 hatchback, the first vehicle from its dedicated EV compact-car platform, went on sale in 2020. UBS analyst Patrick Hummel said the car is “the most credible EV effort by any legacy auto company so far.” The report said VW’s EVs were competitive with Tesla models on key metrics including cost, energy density and efficiency.
The ID.4 crossover SUV is already on sale in Europe, with China and U.S. deliveries beginning later this month. The sleeker ID.5 crossover will follow in the second half of the year. And a seven-seat ID.6 X will go on sale in China in the fall. All of those, and several will run on the MEB platform that underpins the ID.3.
VW plans to launch a smaller, cheaper EV priced around 20,000 euros in 2025, moving up the schedule by two years.
It’s possible that EV sales for VW Group, including Audi, Seat, Skoda and more, could top Tesla sales in 2021.
To help finance the move to EVs, VW is making new combustion models of its most popular brands including Golf, Tiguan and Passat. But it’s phasing out the Beetle and Passat sedan and has no plans to update the Touran minivan.
Shares fell 1% to close at 25.78 on the stock market today. The stock hit 26.23 on Thursday, the highest since March 2015, according to MarketSmith chart analysis. Shares are extended past a buy point of 20.12 from a pullback to the 10-week line in January.
Please follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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