That drop could be a good buying opportunity as optimism about VW’s progress in making electric vehicles could boost sales and drive costs down.

His Volkswagen ID.4 GTX – an electric off-road vehicle priced at 50,000 euros – is considered an effective competitor too

Tesla
(TSLA). At the Munich Motor Show this month, the Frankfurt-based company presented a fully electric small car that is supposed to bring these vehicles to the masses at affordable prices.

These advances will help VW achieve around 20% of its group sales with battery electric vehicles or BEVs by 2025 and around 50% by 2030, according to the company’s own goals. The plan to build six gigafactories by 2030 – with partners such as Northvolt and Gotion – will secure the battery supply and reduce costs.

Tim Rokossa, an analyst at Deutsche Bank, rates the share as a Buy and says that “efficiency gains in battery production through economies of scale should help reduce cell costs by over 50%”. He has a price target of € 270.

Daniel Schwarz, an analyst at Stifel Nicolaus, says the stock could rise 66% to € 312. VW “is well on the way to becoming the largest manufacturer of electric vehicles in 2021,” he says.

According to Stephen Reitman, an analyst at Société Générale, VW plans to cut its fixed costs by 5% from the 2020 level by 2023, down € 2 billion from € 40 billion.

As the automotive market leader in Europe and China, VW operates 118 production plants in 30 countries. It has 662,000 employees and a market value of 122 billion euros. It scores a low multiple of 6.2 times this year’s expected earnings and is valued relative to its peers.

Strong demand for VW’s premium brands – the company has successfully overcome chip shortages by directing shipments to its higher-margin vehicles – and solid performance in its financial services division helped deliver record results for the first half of the year . VW has also raised its outlook for 2021.

Earnings before taxes in the first half of the year amounted to € 11.2 billion on sales of € 130 billion after a loss of € 1.4 billion and sales of € 96 billion in the same period of the previous year.

“We are maintaining our high pace both operationally and strategically,” said CEO Herbert Diess in the half-year results statement.

While deliveries of its electric cars almost tripled last year, sales of the ID.4 in China, VW’s most important market, were disappointing. “The start-up of the ID.4 is going well in Europe and the USA, while the start in China was rather sluggish,” says Rokossa from Deutsche Bank.

Schwarz von Stifel attributes this to poor showroom presentation compared to the plushier endeavors of rivals Tesla and. return

Nio
(NOK) and not fundamental problems with the vehicle.

Arno Antlitz, Volkswagen’s CFO, said Barrons in a statement that the company is “committed to developing a leading automotive software stack and will continue to invest in autonomous driving and mobility services.”