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Volkswagen (VLKAY) to Meet EV Target on Rising Demand

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Volkswagen AG anticipates reaching its target of selling one million electric vehicles (EVs) by 2025, per Reuters. Strong demand from China and Europe and untapped potential in the southern hemisphere are behind this positive expectation.

Notably, after being severely affected by the emissions scandal in 2015, this German auto giant set an ambitious plan to emerge as the world leader in green transport. By 2025, the company intends to deliver one million VW-brand EVs every year. This strategy, to enter into volume production of EVs, has been taken by the company as its rival Tesla, Inc. (TSLA - Free Report) is investing enormous amount for the mass production of the Model 3.

An upsurge in EV investment in China, the world’s largest auto market, can be attributed to the efforts adopted by the mainland to tackle air pollution. This has led to the lowering of battery prices and growing appeal of the EV technology. Other German automakers are also investing a huge amount of money for EVs. Apart from China, Europe and the United States, Volkswagen also sees huge opportunities in other areas, including South America.

Currently, Volkswagen carries a Zacks Rank #3 (Hold) while Tesla has a Zacks Rank #2 (Buy). Volkswagen and Tesla have an expected long-term growth rate of 6.24% and 25%, respectively.

In a year’s time, shares of Volkswagen have outperformed the industry it belongs to. The stock has risen 25.1% compared with 14% growth recorded by the industry.

Some better-ranked stocks in the auto space are Oshkosh Corporation (OSK - Free Report) and Allison Transmission Holdings, Inc. (ALSN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 19.5% over the past year.

Allison Transmission Holdings has an expected long-term growth rate of 10%. Over the past year, shares of the company have gained 12.3%.

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