Volkswagen became Finland’s most purchased electric car in 2020. It has also been a popular stock.
Volkswagen switched its Zwickau production line to produce electric cars instead of Golfs. The ID Neo was a concept that led to the ID.3 and soon after the ID.4, which has greater carrying and towing capacity. Then there are also the e-up and e-Crafter. Intermediate models include mild and plug-in hybrids. The company aims to be CO2-neutral by 2050.
Amidst the pressure from Tesla, Toyota, and others, does the car brand remain a worthwhile investment? There are traditions in car manufacturing, and of course, the Germans also understand other aspects of motoring and environmental requirements, but is their ability to respond to software and other new developments sufficient? Or is it too rigid and old-fashioned?
The stock has gained momentum. In my opinion, VW, both as a product and a company, deserves discussion, to ensure the market leader isn’t overlooked when the conversation turns to Tesla and hydrogen/electric power. Or is VW too practical and unsexy as a topic? I’d be curious to hear opinions, as it’s number one on my watchlist, especially since the stock is currently experiencing a slight downturn.
Note: If Volkswagen feels like a “people’s car” (kansanauto) and Skoda, as a company product, an “eastern car” (itäauto), and your perception of the company is based on this, you’re more wrong than you’d guess. Lambo belongs to the group, and it’s bringing the S3XY that Tesla aims for. A fully electric Lamborghini, would you take it? Or the group still has Bugatti, Bentley, Porsche, and considering VW’s environmental goals, these too are starting to green up. Even if some of the greening comes through “trickery,” like buying emission credits from Tesla, they probably won’t have the nerve to falsify things anymore. I lost my nerve and had to scoop up a slice of Volkswagen for my portfolio after half a day of deliberation. Nostalgic memories of the company’s vehicles played a part.
VW still has some work to do with its reputation. The emissions scandal, quality issues, the forced subjugation of Skoda when they made cars that were too good, etc.
Without defending any particular model; What do you think about Tesla’s reputation in comparison? Or, by that metric, what is the best car brand in terms of reputation right now?
Tesla also has a somewhat lukewarm reputation in general. Their inspection rejection rate in Finland is also quite high. The 2015 models are rejected at a really high rate of 13.4% for relatively new cars, and the 2017 models also at a high rate of 10.1%. The most common defect is in the rear axle – it’s possible that people are “testing” the acceleration a bit and breaking the axle with unusual use.
The best reputation has probably been Toyota & Honda, for ages And Toyota is otherwise a pioneer in hybrid cars, and wasn’t the first hydrogen car also the Toyota Mirai? Pure electric cars are probably still under development for both. Honda only has a “minicooper”-style electric car, concisely named “e”: Honda e - Wikipedia
If we look at a company’s management (strategy and its implementation), product execution (design, manufacturing, and quality control), and customer experience (marketing, sales, image), few companies excel in all areas. Toyota, as a product and process, is among the top in its class for current cars, as is Honda, but the Volkswagen family isn’t far behind, if at all. Toyota had problems conquering the world in its early days (Toyoda) because the product was made for Japanese conditions. They aren’t exactly at the forefront of EV/H matters either. Overall, I have more faith in VW’s capabilities.
I personally joined VW some time ago. The emergence of electric cars (ID model range), attractive valuation figures, and rising interest in the US as an investment target made me buy a small amount. It has developed quite quickly due to recent appreciation. In terms of multiples, VW is “light-years” below hyped electric car companies, but if and when VW becomes the world’s largest electric car manufacturer, investor interest, especially in the US, might start to reach completely different figures.
Is a certain scandal still scratching at VW’s image? Many seemed to like VW’s low-emission cars even in the US before the scandal broke, after which parking lots filled up with Volkswagens that no one wanted anymore.
That’s a good idea. The ID.4 seemed like a cheap, plastic-y vehicle, I test drove it a little over a week ago. Surprisingly noisy too. I can’t say if car manufacturing will be a profitable industry in the future. I would imagine it will go the way of power tool manufacturers, prices will come down and cheap brands will emerge.
Regarding this whole EV craze, one very important thing to remember: whatever the energy form (fuel, electricity, hydrogen, gas), the price level of cars coming to the mass market cannot change significantly (except, of course, due to inflation over time). People are simply not willing to pay above a certain limit for a car. For many, it is ultimately just a means of transport.
In addition, when we talk about manufacturers’ investments (= risks) and how cars are being made into mobile computers in terms of software to enable service business, then the cost structure for the manufacturer is incredibly high.
These two things form the final equation: will the average price of cars rise, or will the tangible quality, for example, in the physical parts of the car, decrease? My personal view is that the quality of materials and the entire car will decrease, and less surprisingly, these mid-range cars will be “noisy and creaking plastic boxes.” Time will tell what other problems will emerge in the longer term. I do not believe that dieselgate was the last one.
Whenever links are shared, it would be nice if they came with some comment explaining why to share a link that is practically discoverable by anyone anyway. I have probably shared mere links myself, but based on the feedback mentioned above, I no longer do so. How are VW’s and Stellantis’s EV sales doing?
This information is also easily found online.
Stellantis EV target 2021: 400k
VAG EV target 2021: 1000k
Both EV margins are likely so poor that they will cause more problems, at least in the coming years.
Stellantis is clearly in better shape anyway: clean history, excellent management, good legacy margins, LCV (Light Commercial Vehicle) leadership, American muscle (RAM, Jeep, Dodge), independent of the Chinese market, etc.
Because of how car emissions are calculated, even loss-making electric car manufacturing is profitable for companies, as they don’t have to buy emission allowances.
Of course. But this goal can also be achieved by other means. Such as FC LCV, smaller cars, PHEV, Tesla credits, etc. VAG’s CO2 performance has not been very impressive, nor has its profit margin last year.
Of course, VAG’s propaganda machine has been running at full speed in recent months. The YouTube comments on the ID4 US commercial reveal that the machine is, however, slightly detached from reality (and that Voltswagen was also a damn poor attempt).
Having observed the electric car market, one can easily find the reason for the recent stock price increase. Volkswagen is gaining excellent momentum with electric cars and has been the first to bring a really good family electric car, the ID4, to the market at a reasonable price. Furthermore, there’s a new appealing model in the pipeline every year for who knows how many years in a row. And capacity shouldn’t be an issue.
Toyota is dominant now, but they are far behind with electric cars, as they haven’t brought anything to the market yet.
There is a slightly overoptimistic view in Europe regarding VAG’s performance and grand plans. Time will tell, I suppose. VAG is severely behind in the hydrogen economy, and its own capacity is theoretical for now. Let’s see how the SEC reacts to the attempted market manipulation.
What significance will the hydrogen economy have for VAG (Volkswagen Group) in passenger car traffic in the very near future? My assessment is that electric batteries are still developing in leaps and bounds. Hydrogen is a way to store energy and will certainly be a significant factor in certain types of transport/applications. Biofuels will also play a big role for a long time to come.
Phew, I thought you were answering the previous posts regarding the hydrogen economy Modesty doesn’t seem to be a thing in these markets.
In any case, Jefferies analyst Philippe Houchois expects VW shares to rise to 295 euros in the coming months.
And Toyota is otherwise a pioneer in hybrid cars, and wasn’t the first hydrogen car also the Toyota Mirai? Pure electric cars are probably still under development for both. Honda only has a “minicooper”-style electric car, concisely named “e”: 
. Market leader 2022.