Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  Equities  >  Xetra  >  Volkswagen AG    VOW3   DE0007664039


SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

VW Bets Big on China Electric Cars, Batteries -- WSJ

share with twitter share with LinkedIn share with facebook
05/30/2020 | 03:48am EDT

By Trefor Moss and Martin Mou

SHANGHAI -- Volkswagen AG is investing EUR1 billion ($1.11 billion) in a Chinese auto maker and a further EUR1.1 billion in a local battery producer, in the German car maker's latest bet on the Chinese electric-vehicle sector.

Volkswagen is increasing its stake in an existing joint venture with JAC Motors to 75% from 50% through the acquisition of half of JAC's parent company, state-owned Anhui Jianghuai Automobile Group. The joint venture focuses on electric vehicles.

Separately, Volkswagen took a 26% stake in Guoxuan High-Tech Co., also known as Gotion High-Tech, becoming the Shenzhen-listed EV battery company's biggest shareholder. Both companies are based in the city of Hefei, 300 miles west of Shanghai.

"This shows once again that Volkswagen is confident in the development of the China market," said Stephan Wöllenstein, Volkswagen's China chief executive, at a news conference Friday.

China's EV market is experiencing a slump after several years of rapid growth. Sales declined 4% last year to 1.2 million vehicles, and then fell 43% on year in the first four months of 2020, accounting for just 3.5% of vehicles sold.

But Volkswagen and others remain convinced that China, followed by the rest of the world, will ultimately embrace EVs. VW has said it would launch 80 EVs globally by 2025, and offer electric versions of all 300 of its global models by 2030.

Despite waning demand, the Chinese government recently increased its own EV target: Instead of accounting for 20% of Chinese vehicle sales in 2025, the prospective share is now 25%, which would equate to sales of roughly six million to seven million vehicles.

Volkswagen aims to deliver 1.5 million EVs in China in 2025, the company said Friday -- an ambitious goal even for the country's bestselling auto maker.

"It's a signal to the industry and especially to Tesla of how determined they are," said Yale Zhang, managing director of Shanghai-based consulting firm Automotive Foresight. Electric-car maker Tesla Inc. started delivering vehicles from its new Shanghai plant in December, and eventually aims to produce 500,000 EVs there annually.

Volkswagen formed its joint venture with JAC in 2017 to build entry-level EVs. The venture has so far launched only one vehicle, but on Friday Volkswagen said it would produce five new models by 2025, as well as build an EV plant and a research-and-development center in Hefei.

Volkswagen has recently finished constructing two new EV plants with a combined capacity of 600,000 a year with its two main joint venture partners, state-owned auto makers FAW Group Corp. and SAIC Motor Corp.

In 2018, China liberalized its auto market, allowing foreign car makers to wholly own their Chinese ventures for the first time. They were previously limited to owning 50% of a local joint venture.

However, the German auto makers in particular have shown a preference for investing in their existing joint ventures or forming new ones. Mr. Wöllenstein stressed the benefits of having a Chinese partner with local connections and a deep understanding of the market. Tesla is the only foreign player that has so far chosen to operate in China without a local partner.

In 2018, BMW AG said it would take a majority stake in its joint venture with Brilliance China Automotive Holdings Ltd., upping its share to 75% at a cost of about $4.2 billion, and announced the formation of a new joint venture with Great Wall Motor Co. to build the electric Mini. In January, Mercedes-Benz maker Daimler AG announced a new joint venture with Zhejiang Geely Holding Group Co. to build electric Smart cars.

U.S. and Japanese auto makers are also pivoting to EVs in China. General Motors Co. has said it would release 20 electric models in China by 2023, while Ford Motor Co. has pledged to launch 15 EVs in the country by 2025.

The investment in Guoxuan -- China's third-largest EV battery maker after Contemporary Amperex Technology Ltd. and BYD -- should help guarantee battery supply as Volkswagen ramps up its electric-car output. In 2018, Volkswagen named CATL as one of three main global battery suppliers, alongside LG Chem Ltd. and Samsung SDI Co., which would together deliver $25 billion worth of batteries to the auto maker.

Buying into a battery maker like Guoxuan gives greater certainty than supply agreements, said Mr. Zhang of Automotive Foresight. "They want to control the battery supply -- that is the key for every EV maker."

Write to Trefor Moss at Trefor.Moss@wsj.com


Stocks mentioned in the article
ChangeLast1st jan.
AMP LIMITED -0.37% 1.355 End-of-day quote.-29.24%
ANHUI JIANGHUAI AUTOMOBILE GROUP CORP.,LTD. -3.03% 8 End-of-day quote.59.36%
AT HOME GROUP INC. 3.09% 22.72 Delayed Quote.313.09%
DAIMLER AG 1.03% 48.4 Delayed Quote.-1.96%
GENERAL MOTORS COMPANY -1.55% 36.83 Delayed Quote.0.63%
JUST GROUP PLC -0.68% 46.64 Delayed Quote.-40.96%
LETS HOLDINGS GROUP CO., LTD. 0.11% 9.04 End-of-day quote.49.67%
LG CHEM, LTD. 1.72% 650000 End-of-day quote.104.72%
LINE CORPORATION 0.19% 5370 End-of-day quote.0.37%
LOOK HOLDINGS INCORPORATED 0.83% 970 End-of-day quote.-22.52%
THE GLOBAL LTD. -0.92% 216 End-of-day quote.-54.14%
THE NEW HOME COMPANY INC. 0.60% 5.06 Delayed Quote.8.58%
VOLKSWAGEN AG 1.06% 139.06 Delayed Quote.-21.10%
WILL GROUP, INC. 1.55% 852 End-of-day quote.-31.95%
WORLD CO., LTD. 1.31% 1397 End-of-day quote.-48.09%
share with twitter share with LinkedIn share with facebook
All news about VOLKSWAGEN AG
10/22Auto startups backed by blank-check companies
10/22Auto startups chasing Tesla race past red flags to go public
10/22TRATON : Says Faster Market Recovery and Cost-Savings Helped 3Q Results
10/21VW-backed EV battery maker Guoxuan eyes 100 GWh capacity by 2025
10/21GUOXUAN HIGH TECH : VW-backed EV battery maker Guoxuan eyes 100 GWh capacity by ..
10/21VOLKSWAGEN VORZÜGE : Goldman Sachs reiterates its Buy rating
10/21AUDI R8 LMS AND AUDI RS E-TRON GT PR : today meets tomorrow
10/21READERS' CHOICE FOR BEST NEW DESIGN : Audi victorious in five out of ten catego..
10/21GLOBAL MARKETS LIVE: A flurry of earnings reports
10/21NOW AVAILABLE WITH NATURAL GAS DRIVE : pre-sales of the new Golf TGI underway
More news
Sales 2020 216 B 256 B 256 B
Net income 2020 4 250 M 5 041 M 5 041 M
Net cash 2020 19 702 M 23 368 M 23 368 M
P/E ratio 2020 16,9x
Yield 2020 1,76%
Capitalization 72 083 M 85 325 M 85 497 M
EV / Sales 2020 0,24x
EV / Sales 2021 0,20x
Nbr of Employees 664 717
Free-Float 57,0%
Duration : Period :
Volkswagen AG Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends VOLKSWAGEN AG
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 166,30 €
Last Close Price 139,06 €
Spread / Highest target 74,0%
Spread / Average Target 19,6%
Spread / Lowest Target -22,9%
EPS Revisions
Herbert Diess Chairman-Management Board
Hans Dieter Pötsch Chairman-Supervisory Board
Frank Witter Head-Finance & Information Technology
Peter Mosch Deputy Chairman
Bernd Osterloh Member-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
VOLKSWAGEN AG-21.10%85 325
DAIMLER AG-1.96%61 293
BMW AG-12.59%48 818
HONDA MOTOR CO., LTD.-16.75%42 531