Christian Armbruester of Blu Family Office, a wealth manager, said VW was best placed to displace Tesla and its shares were extremely cheap by comparison.
“The stock has underperformed Tesla by some 1,000 percentage points in the past two years. However, at long last the share price is on the rise. It already produces nearly as many electric cars as Tesla and it is now getting into batteries. By all measures the people’s car company is still massively undervalued versus Tesla,” he said.
Barry Norris of investment manager Argonaut Capital agreed. He said Tesla was priced to the point that investors expected it to dominate EV sales in the future, but VW was better placed to hit that goal.
“At the beginning of 2021 Tesla had a stock market value of 10 times that of the world’s current leading producer, VW, which during 2020 sold 20 times more cars, had seven times more revenue and was five times more profitable,” said Mr Norris.
He added that the German company had announced at its recent “Power Day” that by 2023 it would be able to halve the cost of its batteries to below that of Tesla and shift 80pc of its output to EVs by 2030.
“This would not only make VW the leading global manufacturer of EVs but would also mean that its EV profits would be comparable to, and in the long term exceed, those of its traditional internal combustion engine vehicles,” he said.
Traditional car companies are catching up with Tesla’s battery technology. Mr Murray said Toyota in Japan was a leading player in solid-state batteries, which promise to be a lighter and safer option, while VW has invested $300m (£217m) in American battery group QuantumScape, whose shares have quadrupled in the past 12 months.
Mr Murray added that Hyundai was a leader in developing lithium-sulphur batteries as well as, alongside Honda and Toyota, lithium-oxide alternatives.