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Volkswagen to Start Car Sharing Service With EVs in Germany

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Per Reuters, Volkswagen AG (VLKAY - Free Report) has planned to introduce car-sharing services with all-electric cars in 2019. The company will initially launch the service in Germany, later expanding to other major cities of Europe, Asia and North America by early 2020.

This introduction of mobility service is Volkswagen’s attempt to provide an alternative option to customers, who don’t prefer owning a car. The new shared mobility facility will be added to the company’s existing division, MOIA. Founded in 2016, the division aims at developing and offering an extensive portfolio of on-demand mobility services.

In Germany, Volkswagen’s car-sharing service will face a strong competition from DriveNow and Car2Go, launched by two major German automakers, which are soon set to merge in order to beat counterparts like Uber Technologies (Read more: Daimler and BMW Set to Merge Their Car-Sharing Services).

Volkswagen AG Price and Consensus

Volkswagen might witness a rise in demand for its lineup of electric vehicles (EVs) owing to the unveiling of the new mobility service. The company intends to sell around 1 million electric cars by 2025. Per management, with its existing plans, the company might actually be able to sell more than the set target.

Price Performance

In the past three months, Volkswagen’s stock has lost 18.9%, underperforming the 6.3% decline of the industry it belongs to.

Zacks Rank & Stocks to Consider

Currently, Volkswagen has a Zacks Rank #4 (Sell). 

A few better-ranked stocks in the auto space are Magna International Inc. (MGA - Free Report) , American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) and Visteon Corporation (VC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Magna has an expected long-term growth rate of 8.5%. Shares of the company have rallied 25.4% over the past year.

American Axle has an expected long-term growth rate of 8.1%. Shares of the company have risen 3.1% over the past year.

Visteon has an expected long-term growth rate of 15%. Shares of the company have jumped 24% over the past year.

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