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Volkswagen's (VLKAY) Audi Collaborates With Hyundai for FCEV

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Volkswagen AG’s (VLKAY - Free Report) Audi AG has agreed on a deal with Hyundai Motor Company to develop fuel-cell technology. Subject to approval from regulatory authorities, both the companies will team up to develop hydrogen vehicle technology to facilitate volume production in a quicker and efficient way.

Further, in order to develop this sustainable energy solution, both the companies are exploring other extensive collaborations. Under this collaboration, the two companies can share non-competitive components and access each other's intellectual property to develop fuel cells for vehicles.

For Volkswagen Group, world's largest auto seller, Audi is responsible for developing hydrogen fuel-cell technology. Per its strategy for fuel cell electric vehicles (FCEVs), Audi is collaborating with companies to develop this sustainable technology at lucrative costs.

Volkswagen AG Price and Consensus

The capacity to cover longer distances and a shorter recharge time make hydrogen an attractive alternative energy option for electric mobility, specifically for large and heavy automobiles, due to FCEV's design. However, the success of hydrogen in becoming a sustainable energy source depends on production and availability of an established infrastructure.

Audi has plans to introduce its fuel-cell vehicle model at the beginning of the next decade, initiating with a smaller production batch. As a sports utility vehicle, the model will offer premium comfort as well as a longer range.

With a gradual shift toward sustainable technologies from gas-guzzling combustion engines, many carmakers are focusing to develop greener technologies for customers, including fuel-cell electric vehicles. Automakers are teaming up with other companies to develop this technology and share costs.

Price Performance

In the past three months, Volkswagen’s stock has moved down 7.6%, underperforming 0.3% increase of the industry it belongs to.

Zacks Rank & Stocks to Consider

Currently, Volkswagen has a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Ferrari N.V. (RACE - Free Report) , Peugeot SA (PUGOY - Free Report) and Toyota Motor Corporation (TM - Free Report) . Ferrari sports a Zacks Rank #1 (Strong Buy) while Peugeot and Toyota carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ferrari has an expected long-term growth rate of 17.3%. Shares of the company have risen 65.4% over the past year.

Peugeot has an expected long-term growth rate of 19.2%. Shares of the company have risen 24.8% over the past year.

Toyota has an expected long-term growth rate of 5.7%. Shares of the company have risen 29.4% over the past year.

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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

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