I think this Bloomberg Article “VW Says It May Soon Be Overtaking Tesla” is an interesting article and viewpoint. VW clearly has the ability to make more cars than Tesla at the moment and they also have the group of brands that allows a common platform to be made into multiple cars e.g. Golf == Skoda/Audi/Seat similar models.
I suspect whether VW will beat Tesla to extract the most value from the electric car market (not the gist of the article) is if the volume*margin numbers stack up.
I think what is interesting from an investment point of view is to determine the future potential value for each of these two companies for electric vehicle sales.
For VW, this is a relatively new segment and over time, one might expect all cars to be replaced by electric. Thus we have a huge potential for the purchase of new vehicles which constitutes great revenue but we need to understand at what cost? I.e. will this be very profitable (have a large margin) for VW? For a large producer like VW that has a broad range of brands that share the fixed costs of developing new car technology, you expect economies of scale, which essentially mean the upfront cost of developing these cars are spread more thinly between a lot of cars so the margin of that product may be higher.
For Tesla, there is a large opportunity to sell more cars as the electric car market is far from saturated in 2020 but will they sell as many as VW… unlikely and as such, the economies of scale are less so to keep the profit margin high, the sticker price of these cars will be higher and will likely mostly sell to more affluent buyers (of whom there are fewer). So while this is a simple example, if the stock valuation of Tesla was very high relative to the future earnings potential then (the forward P/E ratio) then Tesla might not be a great value investment on this basis.
This is a simplistic analysis as there are lots of other factors that may determine the future success of a company in a growing market segment e.g. ability to innovate and create compelling product differentiation (features that only they have). It will be interesting to see where the profits go into this new emerging electric car market.
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