Why Volkswagen Stock Is Suddenly Skyrocketing

What happened

Shares of German auto giant Volkswagen (OTC:VWAGY) were higher again on Wednesday morning, as investors continued to ponder the implications of the company’s plan to surpass Tesla and become the world’s largest seller of electric vehicles by 2025.

As of 10 a.m. EDT, Volkswagen’s American depositary shares were up about 10.2% from Tuesday’s closing price, and up about 30% since last Friday’s close.

So what

Volkswagen said on Wednesday that it expects to deliver more than 450,000 electric vehicles (EVs) in 2021, more than double its 2020 total and a big step toward its goal of selling 3 million EVs a year by 2025. The automaker said that deliveries of its new electric crossover SUV, the VW ID.4, will begin later this month in Europe, and soon after in China and the United States. Several other VW-brand electrics — and related models from other brands within the Volkswagen Group — will also begin shipping in regional markets before the end of year. 

More broadly, Volkswagen executives have been talking up the company’s expansive push into electric vehicles during events around the company’s traditional annual report presentations this week. Volkswagen on Monday shared new details about its plans to develop and produce batteries at six new “gigafactories” in Europe, and to invest in the rapid expansion of fast-charging networks in Europe, China, and North America. 

Now what

Taken together, this week’s news has made Volkswagen’s goal — to lead the world in electric vehicle sales by 2025, if not before — more tangible and more credible than ever. That’s why the stock has surged this week, and it’s why electric-vehicle investors who have long assumed that newer entrants like Tesla would “win” the EV race are now starting to rethink that assumption. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/03/17/why-volkswagen-stock-is-suddenly-skyrocketing/

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