With its eccentric CEO Elon Musk, Tesla has forged a reputation for being one of the world's most forward-thinking companies. Although originally being viewed as controversial, their goal of transitioning society to sustainable energy is one that is increasingly being seen as the future.
Although Tesla has been leading the way, particularly in the production of electric cars, there are now other manufacturers who are rapidly catching up. Volkswagen is the head of the chasing pack and has made so much progress that it's predicted to overtake Tesla in the next 12 months.
But how has Volkswagen made so much progress so quickly?
The Tesla Success Story
Taking an alternative approach has proven to be successful for Tesla. They were the first company to produce an all-electric car with their Roadster in 2008. Although concept cars had been created before, Tesla was the first to genuinely make a practical car that consumers could use for everyday travel.
Tesla went public in 2010, two years after the production of the Roadster. Spread betting on companies such as Tesla can be risky but lucrative if the company is able to realise its vision. Tesla's success in the futuristic car market has sent its share price soaring. Since 2010, shares in Tesla have rocketed by 20,000%, an almost unthinkable rise.
But it remains a volatile stock, and some experts believe that the value will come crashing down. With Volkswagen chomping at its heels, it's very possible that this could come sooner than investors would like.
Volkswagen's chief executive, Herbert Diess, is a longstanding admirer of Elon Musk, and despite their rivalry, the two have a strong friendship. When Diess made his debut on Twitter in January 2021, he quickly tagged Musk and made a quip about grabbing Tesla's market shares.
Although the Tweet was lighthearted, the essence of it was accurate. In 2020, Volkswagen overtook Tesla in Europe with its electric vehicles. The ID.3 and electric Gold sold 56,118 and 33,650 respectively, compared to 85,713 for the Tesla Model 3.
The Volkswagen share price has risen by 50% in 2021. It's not quite the 20,000% rise notched up by Tesla, but it's one that's looking sustainable. Volkswagen have a target of making one million BEV (battery-electric vehicles ) this year which will be "very close" to matching Tesla worldwide.
But Volkswagen aren't stopping there. They already have plans for the global rollout of the ID.4, a 5-seater crossover that is launching this spring.
Electric vehicles are now their core business, and they have contracts with six 'gigafactories' in Europe to meet their requirements while cutting costs.
With a $42 billion investment in electric vehicles, industry experts are tipping Volkswagen to edge ahead of Tesla next year. By 2025, Volkswagen wants to be the largest electric vehicle producer, and they are currently expecting to sell 300,000 more vehicles per year than Tesla by this date.
Their goals are ambitious, but with serious investments, Volkswagen have put considerable financial weight behind the move. The slowdown in the Chinese market and the weakness of the Euro will complicate matters for Volkswagen, but all forecasts suggest that they're on track. Watch this space...