Automotive giant Volkswagen yesterday overtook SAP as Germany’s most valuable listed company after its shares rose 11%, increasing the company’s valuation to more than $166bn. SAP’s value meanwhile slipped to $151bn. The reshuffle at the top table of German industry reflects growing investor confidence that the manufacturers of the iconic VW ‘beetle’ may eventually supplant Tesla Inc. as the world’s leading global electric vehicle manufacturer.
Their confidence was boosted earlier this week when Volkswagen Chief Executive Officer Herbert Diess made back-to-back presentations on how he intends to turn VW into the leading electric-car company by investing in battery factories and by moving a majority of its forthcoming electric vehicle range into a single next-generation battery format.
Officially known as Unified Battery Cell, Volkswagen’s new product will be prismatic rather than cylindric; prismatic cells have gained popularity because their large capacity and shape that make it easy to connect four of them together to create a 12V battery pack. It is scheduled to enter production in 2023 and is expected to drive 80% of the company’s EV fleet by 2030.
In a press release issued by the company this week. Volkswagen said that it intended to gradually reduce the cost of batteries in the entry-level segment by up to 50% and in the volume segment by up to 30%. The remaining 20% of production will rely on special chemistries for unique usage cases, including heavy-duty commercial trucks and high-performance models including Porsche.
In the immediate future, Volkswagen plans to sell one million electric or hybrid cars this year — a near tenfold increase since 2019 — as the German carmaker sets its sights on a recovery in profits after the pandemic. Sales of battery-only cars tripled to 231,000 in 2020, but the company expects an even faster take-up this year, boosted by new model launches. Of the one million electric cars it expects to sell, about half will be battery-only, with the rest plug-in hybrid models.