In a report, Deutsche Bank analysts estimated that VW’s electric-car business alone could be worth $230 billion — more than all of VW is worth now. They hiked their price target for Europe-listed Volkswagen stock by 46% to 270 euros.
The bullish note came as a VW-Chinese joint venture delivered its first electric crossover — the ID.4 Crozz — to 12 customers.
With the ID.4 now selling across Europe, China and the U.S., Volkswagen could quickly pass Tesla in EV sales, Deutsche Bank said Monday. Meanwhile, VW itself expects to roughly match Tesla in all-electric vehicle sales this year.
Volkswagen is targeting the mass market with the ID.4. In China, the Crozz costs the equivalent of $30,800 after subsidies — less than Tesla’s Model Y. It offers a driving range of 248-342 miles on a single charge.
U.S.-listed shares jumped 12.3% to 38.35 in Monday’s stock market trading. Last week, Volkswagen stock hit its highest level since 2009 on aggressive plans for six new battery factories. Tesla stock popped 5.8% Monday amid a bullish new Ark Invest price target at 3,000 by 2025. Tesla stock could be forming a new base, but it is too early for a new buy point.
Tesla’s Model Y was the bestselling electric car in China last month, outselling homegrown Nio (NIO) and XPeng (XPEV). But Tesla now faces more stiff competition, not only from Volkswagen’s ID.4 but also from the Mustang Mach-E electric crossover, which Ford (F) will make in China for local customers.
The ID.4, which the German auto giant plans to eventually produce across the U.S., Europe and China, is the linchpin of its newly expanded “electric offensive” against Tesla.
The electric SUV is also core to its bold strategy to unseat Tesla as the global EV leader “by 2025 at the latest,” with simultaneous production at two factories in Europe, two in China and eventually one in the U.S.
For now, the ID.4 is being imported into the U.S. from Europe. Deliveries to American customers started this month.
By 2025, Volkswagen expects the ID.4 to make up a third of its target for 1.5 million in EV sales that year. Over the next five years, Volkswagen is investing 73 billion euros ($86 billion) on digital and EV technologies, up from its earlier plan to spend 60 billion euros.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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