Ford, GM and Volkswagen shares are hot. Thank electric-vehicle mania.
That explains the surge in VW shares after it laid out in more detail than before how it plans to catch up with Tesla and become a dominant competitor in the global EV market.
Other beneficiaries of the trend include Mitsubishi Motors Corp., whose shares have risen about 45% this year, and Hyundai Motor Co., up 22%.
Just as quickly as traditional auto makers have won the love of global investors they could easily lose it again if they fail to deliver on the lofty promises of building and selling millions of EVs at a profit comparable to their current business with gas-guzzlers, analysts warn.
Proving the point, those auto makers with a looser commitment to EVs have lagged behind those that are pushing aggressively into EVs. Toyota Motor Co., the world’s biggest auto maker by sales, has relied on its hybrid vehicle technology to meet emissions regulations around the world. Its shares have risen nearly 9% so far this year.
BMW AG was one of the first conventional auto makers to develop an electric vehicle and bring it to market, launching the i3 city car in 2013. But after lackluster success, it pulled back on EVs for several years.
While VW has created a standard technology platform for its range of EVs, BMW has relied largely on converting traditional models to EVs and building plug-in hybrids. Oliver Zipse, the company’s chief executive, said Wednesday that BMW would accelerate its EV plans, but wouldn’t commit itself entirely to battery electric vehicles.
“We can assume that in every market a certain technology will become dominant,” Mr. Zipse said. “It becomes expensive when you bet too early on one solution.”
BMW shares are up about 19% so far this year, outpacing the broader market on the back of strong earnings during the pandemic, but lagging behind German rivals VW and Daimler.This story has been published from a wire agency feed without modifications to the text.
Source: livemint
