Deutsche Bank: Volkswagen's electric car business is worth $230 billion

Published: Mar 23, 2021 11:49

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[Deutsche Bank: Volkswagen's electric car business is worth $230 billion] if Volkswagen's pure electric vehicle business could achieve a price-to-earnings ratio similar to that of Tesla and Weilai, its market capitalization would be about 195 billion euros ($230 billion). More than the company's current market capitalization.

Deutsche Bank said Volkswagen's pure electric vehicle strategy should continue to receive more praise, which could push the company to overtake Tesla in electric vehicle sales as soon as next year, according to foreign media reports.

If Volkswagen's pure electric vehicle business can achieve a price-to-earnings ratio similar to that of Tesla and Weilai, its market capitalization will reach about 195 billion euros ($230 billion), more than the company's current market capitalization, analysts led by Tim Rokossa said in a report on March 22. Analysts raised Volkswagen's target share price by 46% to 270 euros.

Volkswagen's common shares rose 14% in Frankfurt, preferred shares rose 8.4%, and its American depositary receipt ((ADR)) also rose in new York. Last week, Volkswagen's German-listed shares rose 22% and 16%, respectively. Volkswagen also snatched the title of software giant SAP as the largest component of Germany's benchmark DAX index, becoming Germany's most valuable company for the first time since its reputation and share price were damaged by a diesel cheating scandal in 2015. The company's plans to compete with Tesla for leadership in electric vehicles have sparked a buying spree among US retail investors and a surge in American depositary receipt transactions.

Rokossa believes that with the global launch of the Volkswagen ID.4 compact SUV, Volkswagen electric vehicle sales are likely to overtake Tesla in the short term. Executives of Volkswagen's Seattle brand said on March 22nd that they planned to launch an electric car for urban areas in 2025, priced between 20, 000 euros and 25000 euros.

Volkswagen plans to transform its Seattle factory on the outskirts of Barcelona into an electric car center, with a goal of producing more than 500000 cars a year, equivalent to Tesla's global delivery in 2020.

Volkswagen truck company Traton SE is also promoting electrification. By 2025, the department will increase investment in electrical technology to 1.6 billion euros from 1 billion euros and reduce spending on internal combustion engines.

Matthias Gruendler, chief executive of Traton, said that the future of commercial vehicles will no longer be driven by diesel vehicles, but by electric trucks. Because of the lower cost, battery-powered trucks are bound to beat trucks that use hydrogen fuel cells, which will be largely limited to niche markets.

Cars batteries

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