Just a few years ago, the then CEO Matthias Müller publicly referred to Tesla as the “announcement world champion”, but with his successor Herbert Diess, the situation at Volkswagen has changed: Diess praises Tesla as a role model at every opportunity and states that the electric car pioneer has at least the lead not to get too big. And according to an analysis by the Swiss bank UBS, it works quite well: They examined the platform for the ID.3 as the first electric car of a new generation at VW and described it as the most convincing approach by a traditional car manufacturer in this area to date.
VW with electric car costs at Tesla level
Details from UBS’s ID.3 decomposition in their Evidence Lab for such analyzes were not made public, but the Bloomberg news agency reported the results. Accordingly, the comparison with the drive technology from Tesla was positive in many respects. Among other things, the MEB platform from Volkswagen, on which further models from Audi, Seat and Skoda will follow after ID.3 and ID.4, should be “fully competitive” with Tesla in terms of costs. Energy density and efficiency are first class.
On the basis of this investigation, UBS increased its price target for VW preferred shares from EUR 200 to EUR 300 and left the recommendation at Buy. This did not fail to have an effect on the stock market: On the Wednesday after the publication, VW temporarily increased more than 5 percent to prices around 187 euros. In the style of Tesla CEO Elon Musk, Volkswagen boss Diess used the opportunity to advertise his company on Twitter. For the first time since 2015, the company’s stock market value exceeded 100 billion euros, he wrote. The market had been waiting for the ramp-up of electric car production at Volkswagen and wanted to see evidence, Diess explained to the UBS study – “and here we are”.
Volkswagen is still a long way away from Tesla on the stock exchange. The share of the electric car pioneer has lost around 25 percent since the announcement of the business figures for the fourth quarter of 2020, including the cautious outlook for 2021. But the market capitalization is still more than 600 billion dollars, about six times as much as VW.
Software as the most important factor
In addition, the focus is no longer just on drive technology in electric cars, but on the software aspect, which Tesla has, so to speak, reinvented on the side. The pioneer’s vehicles are rolling computers in the narrower sense – hardware platforms that can be centrally controlled and updated. Traditional manufacturers such as VW, on the other hand, are only just beginning to acquire the necessary software competence themselves.
The same UBS analyst who significantly increased the price target for Volkswagen doubled his target for Tesla to $ 730 on Wednesday. Established manufacturers who now fully rely on electric cars could attack Tesla’s market leadership in electric cars, Marketwatch quotes from its assessment. When it comes to technology and software in particular, however, Tesla continues to be the undisputed leader. This is “the next battlefield and in our view the most important driver for the evaluation from now on”.