This ‘EV’ share rose 70% within a month. It’s not Tesla.

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The reversal in what investors think

Volkswagen

is nothing short of amazing.

Volkswagen (indicator: VOW. Germany)’s shares, which start on Thursday, have risen 39% in the past month and more than 70% in the past month. These are electric vehicle-like returns.

Tesla

Shares (TSLA), for example, rose about 60% in the run-up to the election for the

S&P 500

in December.

EV investors are ready for such stocks, but large, short-term gains and losses are not as common in the traditional automotive sector.

What has changed at Volkswagen to get its shares going is the electrification goals. The German carmaker now aims by 2030 for about 50% of total sales coming from electric vehicles. The company’s previous goal was to enter approximately 25% of existing sales by 2030.

To make the numbers, Volkswagen also announced plans this week to build six battery factories. The targets are bold and could translate to 5 million or 6 million electric vehicles annually by 2030 – about half of the company’s 10 to 11 million. Tesla, for context, delivered about 500,000 EVs by 2020.

Investors are clearly excited about Volkswagen’s move. It apparently only takes a few days to change from a traditional car manufacturer to an EV player.

For EV bulls, it may be ironic that Volkswagen’s inventory shot up about 40% after the announcement of the battery factories. And in the days following Tesla’s Battery Technology Day in September, which also includes plans for more internal battery production, inventory fell by about 8%.

But the stock market is about expectations, as well as valuations. Few expected Volkswagen to substantially double its planned battery-powered power. By contrast, Tesla is expected to grow 50% or more every year for the foreseeable future – and that expectation has not changed for a while.

Tesla is also estimated at about 6 times in 2025. Volkswagen is estimated at about 0.5 times for 2025 sales. The potential for VW shares is huge if the company can even become a second fiddle for Tesla.

The Tesla share, which starts on Thursday, rose by about 1% for the week, slightly better than the S&P and

Dow Jones Industrial Average.

Investors no longer believe Volkswagen’s EVs mean bad things to Tesla. That just means more cars for everyone as well as less petrol-powered cars.

As for Volkswagen, the air came out of stock on Thursday. Shares in foreign trade fell by more than 14%.

Write to Al Root at [email protected]