Announcements by incumbents of going electric and spending billions doing so have come thick and fast since then. Volkswagen (XETRA: VOW), which owns marques like Audi, Skoda, Bentley, Lamborghini and others, has been the most aggressive – pledging to spend $86 billion through 2030 with a target of 50% of sales to be electric by then.
But Tesla remains way out in front – so far this year the company is responsible for 26% of all the battery power found in newly-sold passenger cars hitting the road, double the kWh of its nearest competitor VW. On a kWh-basis Volkswagen is the number two seller of electric cars, with a 12.9% global market share, about the same as the Model 3 by itself.
Tesla’s relative valuation shows investors regard the age of the internal combustion engine as well and truly over. To test this theory, MINING.COM assigned a value of zero to VW’s traditional vehicle business.
This way investors can compare traditional automakers like VW with Tesla, based on their ability to compete in the battery powered light duty vehicle market. For the sake of apples vs apples, the comparison also excludes all the battery power in the plug-in hybrids VW sells.
For the sake of accuracy, only end-user registered vehicles are counted – not reported production numbers, dealer deliveries or sales projections. At Tesla’s current market valuation, every GWh in the company’s cars sold this year to end-August is worth $30 billion in market cap.
The company’s closest competitor, Volkswagen attracts just over $8.4 billion for the same achievement. Volkswagen would be worth $510 billion if investors were as charged up about its electric cars as they are about Tesla’s.
Again, it’s full electric cars only – anything else Wolfsburg produces is worthless under this scenario. Golf GTI, Audi and Lamborghini Aventador? Relics of a bygone era. Those Bugattis and Bentleys? Not even worth anything as scrap metal.
Put another way, Tesla’s sheet metal, interior finishes, suspension, paint jobs, audio-systems, tires, wiper blades, headlights, and those oh-so-big touch screens are worth $500 billion more than the same stuff in your average VW.
(Google “Tesla build quality” if you think $500 billion may be a tad rich.)
But it’s the over-the-air software updates, the “full” self-driving system and our glorious robo-taxi future that’s worth so much (and probably double that) —is the argument.
