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Daimler (DDAIF) to Outlay 70B Euros for Digital, Electrical Revamp
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Daimler AG’s recently announced the company’s new investment plan of more than 70 billion euros ($85 billion) from 2021 through 2025. The investment is part of the company’s strategic course of action to accelerate its ongoing transformation toward electrification and digitization targeted at achieving the desired level of profitability.
After a series of controversial discussions between Daimler’s work council and Supervisory Board, the new budget for 2021 through 2025 has been approved by the latter.
The investment will be made in the company’s research and development (R&D) and in its property, plant and equipment from 2021 through 2025. The aim is to reduce Mercedes-Benz’s R&D expenditure and capital expenditure during this period and make it more than 20% lower in 2025 than incurred in 2019.
Further, within this business plan, Daimler’s Truck arm will be able to strengthen its plans toward providing carbon-free transportation.
Daimler’s management and its General Works Council have also reached a consensus to set up a transformation fund worth 1 billion euros, having tenure of five years until 2025. The fund value is over and above the planned investments of 70 billion euros. The details of the fund will be finalized between the two parties in the first quarter of 2021. The transformation fund has been established to enable additional investment in the ongoing development of the company’s sites. The fund will mainly be utilized for development of cutting-edge technologies and to ensure employment protection during the transformation at the German sites. Thus, the fund will help mitigate the disruption of the transformation and is a crucial element to make the transformation at Daimler a justified one.
Amid the heightening climate-change concerns, investors are now intrigued by automakers which lower their global carbon emission by providing green mobility solutions. Amid this transforming scenario, automakers are revamping their business models to shift toward electric vehicles (EV) and kick start an era of green transportation.
However, Daimler’s Mercedes-Benz has been comparatively laid back than its rivals in rolling out all-electric vehicles in the market. The automaker also let down customers when it delayed the debut of its EQC electric SUV in North America.
Nonetheless, the German automaker’s new investment plan reflects its efforts to redeem itself with an aim to align pace with the transforming face of the auto industry, and rev up its electrical and digital transition. The company is also scheduled to launch two of its EVs, EQS and EQA, in the upcoming year.
Recently, Volkswagen AG’s (VWAGY - Free Report) subsidiary Audi also announced the company’s plans to invest 12 billion euros on bringing 30 EVs to market, including 20 all-electric vehicles.
Notably, shares of the company have appreciated 25.9%, year to date, while its industry has witnessed a rise of 14.7%.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Daimler (DDAIF) to Outlay 70B Euros for Digital, Electrical Revamp
Daimler AG’s recently announced the company’s new investment plan of more than 70 billion euros ($85 billion) from 2021 through 2025. The investment is part of the company’s strategic course of action to accelerate its ongoing transformation toward electrification and digitization targeted at achieving the desired level of profitability.
After a series of controversial discussions between Daimler’s work council and Supervisory Board, the new budget for 2021 through 2025 has been approved by the latter.
The investment will be made in the company’s research and development (R&D) and in its property, plant and equipment from 2021 through 2025. The aim is to reduce Mercedes-Benz’s R&D expenditure and capital expenditure during this period and make it more than 20% lower in 2025 than incurred in 2019.
Further, within this business plan, Daimler’s Truck arm will be able to strengthen its plans toward providing carbon-free transportation.
Daimler’s management and its General Works Council have also reached a consensus to set up a transformation fund worth 1 billion euros, having tenure of five years until 2025. The fund value is over and above the planned investments of 70 billion euros. The details of the fund will be finalized between the two parties in the first quarter of 2021. The transformation fund has been established to enable additional investment in the ongoing development of the company’s sites. The fund will mainly be utilized for development of cutting-edge technologies and to ensure employment protection during the transformation at the German sites. Thus, the fund will help mitigate the disruption of the transformation and is a crucial element to make the transformation at Daimler a justified one.
Amid the heightening climate-change concerns, investors are now intrigued by automakers which lower their global carbon emission by providing green mobility solutions. Amid this transforming scenario, automakers are revamping their business models to shift toward electric vehicles (EV) and kick start an era of green transportation.
However, Daimler’s Mercedes-Benz has been comparatively laid back than its rivals in rolling out all-electric vehicles in the market. The automaker also let down customers when it delayed the debut of its EQC electric SUV in North America.
Nonetheless, the German automaker’s new investment plan reflects its efforts to redeem itself with an aim to align pace with the transforming face of the auto industry, and rev up its electrical and digital transition. The company is also scheduled to launch two of its EVs, EQS and EQA, in the upcoming year.
Recently, Volkswagen AG’s (VWAGY - Free Report) subsidiary Audi also announced the company’s plans to invest 12 billion euros on bringing 30 EVs to market, including 20 all-electric vehicles.
Daimler, peers of which include BMW AG (BAMXF - Free Report) and Honda (HMC - Free Report) , currently flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, shares of the company have appreciated 25.9%, year to date, while its industry has witnessed a rise of 14.7%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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