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Volkswagen (VLKAY) to Invest $25M for EV Battery Outsourcing

Zacks

Volkswagen AG VLKAY announced that it would invest $25 billion (EUR 20 billion) to ensure ample battery capacity for the production of its electric vehicles (EVs). Further, by the end of 2022, the company aims to manufacture its battery-powered EVs in 16 locations worldwide.

At present, Volkswagen produces electric vehicles in three locations and also aims to equip nine additional plants in the next two years. The goal is in sync with its target to sell 3 million of electric cars by 2025. Moreover, it plans to offer an electric version of all 300 models by 2030.

Per management, Volkswagen intends to offer the largest fleet of EVs across all brands and regions within few years. To accomplish that, it will introduce nine new vehicles in 2018, out of which three will be fully electric-powered. Further, from 2019, the company hopes to introduce a new EV model every month.

Volkswagen AG Price and Consensus


With an aim to lead the EV-race, Volkswagen already started collaborating with companies to meet its need of parts required for manufacturing these vehicles. It has already partnered with battery manufacturers, who will provide battery capacity requirements in Europe and China. However, the decision regarding EVs to be manufactured in North America will be taken soon.

Price Performance

In the last six months, shares of Volkswagen have outperformed the industry it belongs to. During the period, the company’s stock rose 15.1% in comparison with the industry’s gain of 8%.

Zacks Rank & Other Key Picks

Volkswagen sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the auto space are General Motors Company GM, Honda Motor Co. Ltd. HMC and BMW AG BAMXF, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

General Motors has an expected long-term growth rate of 8.4%. In the last six months, shares of the company have declined 2.2%.

Honda has an expected long-term growth rate of 5.2%. Shares of the company have gained 18% in the last six months.

BMW has an expected long-term growth rate of 4.2%. In the last three months, shares of the company have gained 3.8%.

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