When you think of electric cars, what’s the first thing you think of?
Most likely, it’s Tesla. Tesla has paved the way for the electric car market, and has seen unpresented growth in it’s stock price, and it’s earnings in recent years.
However, it could be that Volkwagon is going to surpass Tesla and become the dominant players in the EV market.
Herbert Deiss, Volkswagen’s CEO, made a series of announcements on his plan to beat Elon Musk. As a result, the VW she stock soared.
One of the biggest criticisms of Tesla’s growth is that it’s earnings and gross sales don’t reflect it’s stock price. Tesla can be considered a “story stock.” Most of the investors are buying into the idea that Tesla will revolutionize the way we drive. This story, or narrative, can create huge amount of excitement around a stock. In some cases that excitement will pay off, in others it won’t.
The narrative around a stock doesn’t always reflect the reality.
But Volkswagen is a different kind of company. They have a huge advantage over Tesla will infrastructure, volume and distribution.
Volkswagen is a giant compared to Tesla. Last year. VW sold 9 million cars, while Tesla sold just half a million.
Currently, Tesla still outperforms VW in total EV sales. But the gap is closing fast.
VW shows a 197% increase in electric vehicle sales in 2020.
Will VW be able to use it’s huge infrastructure advantage to become to worlds leading provider of electric vehicles?
It’s an interesting development. I will be keeping a close eye on this.