Volkswagen Soars 8% After Upgrading Profit Guidance, Plans to Build Six EV Gigafactories in Europe by 2030
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Shares of German carmaker Volkswagen (OTC: VWAGY) soared about 8% after the company unveiled an ambitious plan to achieve higher profitability in years ahead.
The company is aiming to achieve an operating margin between 7% and 8% after 2021. VOW also confirmed it is looking to finish the year at the upper and of a 5% - 6.5% range in 2021. Higher profitability will be achieved through lower costs with as much as 2 billion euros savings identified for 2023 compared to 2020.
The company’s “Power Day” event took place yesterday with the carmaker planning to build six "gigafactories" in Europe by 2030 with a total production capacity of 240 gigawatt hours per year. The first two factories will be located in native Germany and Sweden.
“This period is probably the most crucial for the whole industry. Within the next 15 years we will see a total turnover of the industry. Electric cars are taking the lead and then software really becomes the core driver of the industry,” Chief Executive Herbert Diess told CNBC.
As a part of this big EV push, Volkswagen is increasing the number of new electric vehicle charging points across Europe, the United States and China. The company has agreed a series of partnerships across Europe that will result in a network of 18,000 public charging points in Europe by 2025, up from about 3,600 at present.
“Electric cars already today are very, very competitive and they’re becoming more competitive over time. that gives us the certainty that this is the right way going forward. Electric cars actually will bring down the cost of individual mobility further,” Diess added.
The company is also working on a new unified battery cell that will be launched in 2023. VOW is planning to use this battery cell in up to 80% of the group's electric vehicles going forward.
"The one size fits almost all cell design will radically reduce battery costs ... by up to 50% compared to today. Lower prices for batteries means more affordable cars, which makes electric vehicles more attractive for customers,” CEO Herbert Diess said at Monday's event.
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