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Why Volkswagen Stock Is Suddenly Skyrocketing

By John Rosevear - Mar 17, 2021 at 11:03AM

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Volkswagen's goal to beat Tesla now looks very realistic.

What happened

Shares of German auto giant Volkswagen (VWAGY 4.44%) 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. 

A blue Volkswagen ID.4, an electric SUV, leads a line of VW cars at the end of a factory assembly line.

Electric Volkswagen ID.4s are already rolling off the assembly line at VW's plant in Zwickau, Germany. Volkswagen factories in China and the United States will soon begin shipping ID.4s as well. Image source: Volkswagen AG.

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. 

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Stocks Mentioned

Volkswagen Aktiengesellschaft Stock Quote
Volkswagen Aktiengesellschaft
$20.75 (4.44%) $0.88
Tesla, Inc. Stock Quote
Tesla, Inc.
$707.73 (7.43%) $48.93

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