In the first half of this year, Volkswagen (VWAGY -0.91%) sold 217,100 battery electric vehicles (EVs). By comparison, Tesla (TSLA -0.35%) sold 564,743 -- about 2.6 times as many. Volkswagen management has said its goal is for 20% of its sales to be electric by 2025, which it believes will make it one of the top three EV makers in the world. But can it surge past Tesla to become the largest EV maker in the world?

Tall ambitions

By 2030, Volkswagen aims for half of its sales to be EVs. It is also investing heavily to target sales of up to 3 million electric vehicles annually by 2025.  Management expects to spend 35 billion euros on electric mobility by 2025. According to a study by Bloomberg Intelligence, Volkswagen's EV sales may exceed Tesla's by 2024.

Whether it meets that goal or not, Volkswagen will give Tesla a run for its money in jockeying for the top position. The company has several advantages including an established dealer network and a strong brand. In addition to the Volkswagen brand's ID models, it counts the Audi e-tron, Audi Q4 e-tron, Skoda Enyaq, and Porsche Taycan among its top-selling EVs. That wide selection of models catering to customers at all price points is contributing to the rapid growth of Volkswagen Group's EV sales.

More importantly, Volkswagen has an established supplier network, global production capacity, and deep expertise in the automotive sector. The company expects the supply situation will improve in the second half of this year. Its EV deliveries in June were back up to the monthly levels it achieved in the fourth quarter of last year. Volkswagen has also consistently grown its revenue over the years.

VWAGY Revenue (TTM) Chart

VWAGY Revenue (TTM) data by YCharts

Volkswagen seems to be ahead of other legacy automakers in the EV segment. Apart from Tesla, only China's SAIC sold more EVs than Volkswagen in 2021.

Volkswagen is also focusing on developing its battery supply -- a crucial part of the EV manufacturing process. It plans to set up six battery factories in Europe by 2030, with a total output of 240 gigawatt hours per year.

A top EV stock to buy

Volkswagen stock has slumped by roughly 33% so far this year due in part to the broader market downturn, but also due to company-specific growth concerns attributable to its supply chain issues and China's pandemic-related restrictions. The stock now trades at a very reasonable price-to-earnings ratio of 4.7.

VWAGY PE Ratio Chart

VWAGY PE Ratio data by YCharts

EV stocks have typically traded at high premiums compared to legacy car companies. However, if Volkswagen transforms itself into an EV leader with half of its sales electric by 2030, its valuation would surely rise in response.

Whether Volkswagen takes the mantle of EV leader from Tesla or not, the legacy automaker looks well-positioned to become a top player in the segment. That should be enough to support steady growth in its stock price over the long term. Wise investors might consider picking up shares today in a diversified basket of EV stocks to hold for the future.