Summary
- VW has the largest investment spend, among global automotive manufacturers, into EV and software.
- With plans to build 6 gigafactories by 2030 as well as a unified cell strategy for its EV platform, VW is pushing ahead with high growth in its EV segment.
- VW is ahead of the curve as it is building an in-house battery production capability and investing further upstream, securing battery supply and controlling battery costs.
- Based on my 2025 forecasts, my estimate for VW's target price is EUR313, which implies a solid 75% upside potential.
The transition towards Electric Vehicles (EV) is happening today and gaining momentum as EV penetration accelerates globally. Bloomberg estimates that about 5.6 million passenger EVs will be sold this year, which is almost double that sold in 2020. Furthermore, in 2021, 8% of all vehicles sold were EVs and this number is poised to increase as the EV transition continues over the next decade.
I believe that when looking at global automotive manufacturer incumbents, there is a clear winner in the EV transition race and that is, Volkswagen (OTCPK:VWAGY).
Investment thesis
I believe that VW will be a structural winner in the EV transition race due to the following reasons:
- VW's commitment to the transition is the highest. It has the largest investment spend in EV and software, both high growth areas of the future, among global automotive manufacturers over the next 5 years.
- In addition, VW has a clear, ambitious battery strategy to...
Read Full Story: https://seekingalpha.com/article/4477526-volkswagen-structural-winner-in-the-ev-transition-race
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