The Bentley has a renowned 100-year history as a premium brand, but the company itself has actually been owned by Volkswagen (OTCMKTS: VWAGY) since 1998. Its first all-electric vehicle is aiming for production by 2025 before the high-performance brand completes its fully electric transition by 2030.
Why is Bentley going electric?
Decarbonization of its fleet is a priority for the Volkswagen group over the next several years, and given Bentley’s high-performance capabilities, it contributes significantly to CO2 emissions. While it only makes up a small percentage of the overall business, it’s still a meaningful and growing segment that produced more than 14,600 vehicles in 2021, which was a 31% increase year-over-year (YoY).
Volkswagen’s EV advantage
Bentley is Volkswagen’s prestigious brand, but it’s just one of the many badges that make up Volkswagen’s diverse product portfolio in addition to Audi, SEAT, Skoda, Bugatti, Lamborghini, and Porsche, as well as the company operating its own line of commercial vehicles, campers, trucks, and buses.
And that’s exactly where Volkswagen’s competitive advantage lies when it comes to the electric vehicle race.
The company produced more than 8.8 million vehicles in 2021, an absolute monstrous number compared to Tesla’s figures which were roughly a million. Volkswagen increased battery electric vehicles produced by 96% year-over-year (YoY) in 2021 too. It’s the EV leader in Europe, it takes the number 2 spot in North America, and it more than quadrupled EV sales in China over the course of the year, so it’s ticking all the boxes, despite the legacy automaker tagline.
Is Volkswagen a good EV investment?
There’s a clear advantage in its distribution network and diversified vehicle portfolio, but there’s still some catching up to do in autonomy and software. That being said, 50% of all vehicles being entirely electric is the goal for 2030, a $4.5 billion investment has been made in digitalization, and the company intends to roll out autonomous technology capabilities across three continents by 2025.
Volkswagen is a reminder of some principles of investing. It isn’t just about buying solid companies, it’s about not overpaying companies. Compare Volkswagen’s market capitalization to one of the newer EV startups that have little to no sales generated, and it’s quite obvious which investment will likely yield higher returns over the long run — and Volkswagen has another thing they don’t — a 2.75% dividend yield.
Financial Writer at MyWallSt
David's favorite stock is Google. He's a daily user of its YouTube platform, where you can learn or find something brand new at the touch of a button. He believes the company will continue to grow for many years to come.