German automotive giant Volkswagen (VLKAY - Free Report) detailed its plans on Tuesday to become one of the biggest producers of electric vehicles, vowing to ramp up production and bolster its EV-capable plants all over the world.
In a move that would see Volkswagen blow past Tesla’s (TSLA - Free Report) production schedule, the German company announced its plans to run 16 electric vehicle plants by the end of 2022. Volkswagen, which currently produces electric vehicles at just three locations, is also ready to begin to producing battery-powered vehicles at nine more plants by 2020.
Volkswagen noted that it has already secured partnerships with battery manufacturers in Europe and China—worth roughly EUR 20 billion—while a North American supplier decision is set to be made soon. CEO Matthias Müller noted that Volkswagen will introduce a new electric vehicle “virtually every month” starting in 2019.
“This is how we intend to offer the largest fleet of electric vehicles in the world, across all brands and regions, in just a few years,” Müller said at Volkswagen’s annual media conference in Berlin, according to a company statement.
Volkswagen first rolled out its “Roadmap E” initiative last fall. At the time, the company announced plans to build up to three million electric vehicles a year by 2025. The firm also plans to market 80 new electric models during that same timeframe.
In 2018 alone, the company is set to add nine new vehicles to its portfolio, which currently boasts eight e-cars and plug-in hybrids.
TSLA vs. VLKAY
Up to this point, Tesla’s outspoken CEO Elon Musk has seemed to over promise and under deliver when it comes to production. Tesla sold a total 102,807 cars last year, with the more expensive Model S sedan and Model X SUV making up a large portion of sales.
Meanwhile, the company has faced continued setbacks on its more affordable Model 3. But it noted in a recent statement that it made “major progress addressing Model 3 production bottlenecks,” and Musk’s company expects to reach the 5,000 vehicle per week milestone by the end of Q2.
Still, Tesla is currently a Zacks Rank #4 (Sell) and is projected to remain unprofitable once again in fiscal 2018.
On the other hand, Volkswagen is the biggest automotive company in the world by unit volume, having sold 10.7 million vehicles last year across its slew of brands, which includes VW, Audi, Porsche, Skoda, and few high-end luxury brands such as Lamborghini. Volkswagen is also currently a Zacks Rank #1 (Strong Buy) and sports an “A” grade for Value in our Style Scores system.
Investors will also be happy to note that the German firm’s commitment to electric vehicles will not curb its traditional vehicle production.
“We are making massive investments in the mobility of tomorrow, but without neglecting current technologies and vehicles that will continue to play an important role for decades to come,” Müller said. “We are putting almost EUR 20 billion into our conventional vehicle and drive portfolio in 2018, with a total of more than EUR 90 billion scheduled over the next five years.”
Tesla might still be a Wall Street darling, but while it keeps boasting about plans for the future, proven auto makers have joined the EV race. General Motors (GM - Free Report) , Toyota (TM - Free Report) , Ford (F - Free Report) , and an array of other big names companies could be poised to blow Tesla out of the water soon enough.
And of all of these established automotive powers, Volkswagen has announced itself as the company to beat in the race for electric vehicle supremacy.
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