Posted By Adam Slodowy Posted On

Volkswagen targeting to dethrone Tesla as best in the car stock market

Pioneer automakers such as Volkswagen and General Motors have seen a steep rise in their stock shares as they prepare to dive into the electric vehicle (EV) market. Tesla is still the king in the EV industry stock markets. However, with investors dipping their hands deep into their pockets to fund EV production by traditional carmakers, Volkswagen may give Tesla a run for its money in the future. VW is the second largest car seller taking after Japanese Toyota, which holds the crown.

In 2021, VW stock shares have increased by more than fifty percent, accord to reports by FactSet data, a financial data and software company based in Connecticut. General Motors (GM) shares have risen by about forty-six percent, while those of Toyota has risen by nine percent. Although Tesla, owned by billionaire Elon Musk, saw its stock share drop by ten percent this year, it is still top. Its percentage share equates to that of VW, Toyota, Daimler, Ford, and GM combined.

Despite the Covid-19 pandemic that halted the economy for some months, the car industry has bounced back in a great way. Other areas such as airlines and the energy industry have also experienced an increase in stock shares. With economies getting a go-ahead to use different Covid-19 vaccines to tame the pandemic, investors push the global economy. The financial sector is still assessing the traditional car manufacturers despite the promising opportunity to transition from gasoline-powered to battery-powered vehicles.

 “US stimulus spending is providing an extra thrust to global economic growth. But at the same time, financial markets are re-evaluating traditional car manufacturers,” said Michael Muders in a commentary with the Wall Street Journal. Muders is a senior fund manager with Union Investment, a Frankfurt-based Investment Management Company.

The US policy and laws have contributed to the rise in the EV car sale markets. Besides, pioneer automakers vouching for EVs, batteries, and greener software is attracting investors. The belief in an electric future across several government sectors has been crucial to the rise of the stock markets.

“One of the things we’re really happy about is we are completely aligned in our belief in an all-electric future,” said Mary Barra General Motor’s CEO. But what creates the large gap between Tesla and the traditional automakers? Investors think Tesla is on its level and is an altogether different company compared to the pioneer carmakers. According to ARK investment, Tesla is a “really an autonomous-vehicle, and electric car manufacturer rolled into one, which will set it up to be the “robotaxi” service of the future.”

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