Tesla is getting accolades from the competition over its financial results amid the COVID-19 pandemic as the head of Volkswagen says that he believes the electric automaker could become the world’s most valuable company.
Last week, Tesla announced its Q2 2020 financial results and crushed expectations by delivering a profit despite a difficult situation due to the global pandemic.
Tesla’s results come as almost all other automakers are reporting notable losses due to crashing sales during the second quarter.
Herbert Diess, Volkswagen’s Chairman, took to LinkedIn to comment on Tesla’s results and made a surprising prediction.
The head of the German automaker congratulated Tesla and its results and said that he believes Tesla, along with Apple and Volkswagen, could become the most valuable company in the world within just 5 to 10 years:
“Elon Musk delivers results that many didn’t think possible. They show that electric cars can be profitable. As one of the few automakers Porsche AG (e.g.), Tesla will drive through the Corona crisis without a loss quarter. It confirms to me that in five to ten years, the most valuable company in the world will be a mobility company – that Tesla can, Apple or Volkswagen AG,… Hot.”
Apple is already often the most valuable company in the world by market capitalization as it battles Microsoft and Amazon around the $1.5 trillion mark, but Tesla and Volkswagen are trading at a fraction of that.
Therefore, it is bold call to say that either one could catch up to this level by the end of the decade.
Diess’ comments come as the new CEO of Audi, a Volkswagen brand, admitted that “Tesla is 2 years ahead of the industry in critical areas.”
The head of Volkswagen also implemented what he internally called the “Tesla catch-up plan” in order to close the software gap between the German automaker and Tesla.
I think he may be right – though I’d also throw Amazon into the mix.
People are skeptical of Diess including Volkswagen as a potential trillion-dollar company within the next 5 to 10 years, but I do believe that if a current established major automaker can come up out on top of the electric revolution it would be Volkswagen.
They are the ones taking the most aggressive approach and they are securing battery supply as fast as they can by getting involved at every level.
You can argue that this aggressiveness in going electric is motivated by changing their image after the Dieselgate scandal and you might be right, but if it results in converting fossil fuel car production capacity to electric car production capacity, I’m OK with it.
What do you think? Let us know in the comment section below.
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