German carmakers challenging the Tesla electric throne
Brussels (Brussels Morning) The determination and drive of German carmakers Volkswagen and BMW to transit to battery electric vehicles (BEVs) in the future, is reflected in their rising stock as investors respond to their stated goals of going after Tesla’s market share more seriously, Reuters reported.
Despite accounting for only a fraction of the volume produced by the largest global carmakers, Toyota and Volkswagen, the all-electric manufacturer Tesla soared in the stock market in recent years, overtaking all traditional, internal combustion engine (ICE) manufacturers.
The German car industry, once a flagship of the country’s export-oriented economy, got left behind as an unprecedented gap developed in the stock markets between early adopters of the all-electric technology, and those who have yet to catch up. Despite their slow start, the German carmakers are well-positioned, both in production capacity and distribution platforms, to grab a more significant share in the BEV market.
Away from ICE
As Volkswagen and BMW are gradually shifting away from ICEs, the key metric seems to be investor trust, which recently began treating the companies as undervalued. The impetus to the electrification drive is boosting both the German DAX stock market index, and the broader European equity markets.
On Monday last, VW CEO Herbert Diess announced that the company aims to make 70% of its European sales all-electric.