Volkswagen, ARI Motors, BYD – Electric vehicles in the fast lane: Time to invest

Volkswagen - Under pressure

The Wolfsburg-based automaker is facing a challenging chapter in its history. Falling sales, high production costs, and intense competition – particularly in the Chinese market – are weighing on the Company. The latest 67% year-on-year decline in earnings per share and a share price that has fallen to its lowest level in almost a quarter of a century highlights the issues at hand. The Company is now trying to counteract these challenges with plant closures and possible job cuts in order to create a solid foundation for sustainable profits again. E-mobility, previously seen as the growth engine of the future, is also developing into a challenge, as demand is cooling, especially in the European market, while regulatory requirements are putting additional pressure on the sector.

Volkswagen launched new models this year, including the Tiguan, the Passat Variant, and the fully electric ID.7 sedan. Volkswagen aimed to score points in both the combustion engine and electric mobility segments with a mix of innovative hybrid solutions, improved technologies and aerodynamic optimizations. The Tiguan, in particular, was expected to play a key role as a best-selling model, with new drive options aimed at appealing to a broad range of customers. This product strategy illustrates the Company's balancing act between tradition and the future to secure its long-term competitiveness.

While Volkswagen is struggling for economic and strategic orientation, internal conflicts are intensifying. In collective bargaining talks with IG Metall, the fronts collide: employee representatives are demanding reliable promises of job security, while the Company is insisting on cost reductions. Initial warning strikes at major locations underscore the gravity of the situation. However, with its diverse range of brands that extend into the luxury segment, the Company still has the opportunity to turn things around. Perhaps the saying "buy when the cannons thunder" applies here. The stock is currently trading at EUR 83.14.

ARI Motors – Innovation and niche focus pave the way to success

Despite the decline in government subsidies and a noticeable price sensitivity among consumers, ARI Motors is pursuing a clear strategy. By focusing on affordable, practical, and environmentally friendly vehicles suitable for everyday use, the Company is targeting the growing demand for sustainable mobility solutions. This approach is aimed at both private and commercial customers, who are increasingly looking for cost-efficient and low-emission transportation options. The Company offers a wide range of vehicle body variants, particularly for business use. With this market-oriented approach, ARI Motors demonstrates that even smaller companies in the electric mobility industry can thrive.

One example of this strategy is the ARI Bruni, a compact city car designed specifically for young families and small businesses. With a net starting price of EUR 15,990, it seats four people and impresses with its flexibility and everyday practicality. Media attention and a stronger brand presence have significantly increased interest in the vehicle. The Company plans to increase its sales of electric passenger vehicles by an impressive 22% by 2025 – a goal to which the Bruni is expected to make a significant contribution. In particular, the model's ease of use, low-cost maintenance and flexible interior design make it an attractive proposition in a market segment that has so far been neglected by larger manufacturers.

In addition to its attractive products, ARI Motors has established itself through efficiency and growth. The Company has already successfully delivered over 236 vehicles in 2024 and expects to generate a turnover of EUR 6 million by the end of the year. ARI Motors counters criticism of its use of Chinese base models with transparency: the vehicles are optimized with extensive adaptations specifically for the needs of the European market. The Company is postponing its Annual General Meeting to January 17, 2025. This is due to personnel changes on the Board of Directors, which is once again fully operational with the newly appointed members Karl-Heinz Kustermann and Dr. Rasso Graber. The share is currently trading at EUR 0.447, giving a market capitalization of just around EUR 4.5 million.

BYD – A driver of the global e-mobility revolution

Within just a few years, the Chinese carmaker BYD has positioned itself as a key player in the international market for electric vehicles. Originally a battery manufacturer, the Company is increasingly focusing on innovation and technology development. Supported by over 102,000 engineers and a global network of 11 research sites, BYD is now one of the leading innovators. The Company accounts for around 25% of all newly registered electric vehicles worldwide – a testament to its dominant market position. Its recent milestone is particularly impressive: BYD produced two million vehicles between July and December 2024.

In November 2024, BYD set a new sales record with 506,804 vehicles sold – a year-on-year growth of 68%. While China remains the main business area, the international market is increasingly coming into focus. With the new electric SUV model "Sealion 7", BYD is strengthening its position in Europe, particularly with a view to circumventing trade barriers. The first debut model in Norway marks the ambitious claim to further expand its role as a global market leader.

BYD is also in a strong financial position. In the third quarter, revenue rose to CNY 201.1 billion, an increase of 24% over the previous year. This means that BYD has overtaken Tesla in terms of revenue for the first time, even though its US competitor is maintaining higher margins. The stock remains volatile but has gained over 50% since its year low. Experts expect earnings per share of CNY 16.56 in 2025 – a positive signal for growth potential in a dynamic market. Currently, BYD and Tesla are leading the way in electric vehicles. BYD's stock is currently trading at EUR 32.26.

The electric mobility industry is dynamic, but not without challenges: Volkswagen is struggling with declining sales and geopolitical pressure – the ID.7 and new hybrids should turn things around. ARI Motors focuses on niche markets and affordable models like the ARI Bruni. There are also many vehicle variants for every type of business. BYD is impressing with its global dominance, record sales, and technological strength, which supports its international expansion. While Volkswagen is struggling to stabilize, ARI Motors and BYD are proving that success in e-mobility requires innovation, efficiency, and a focus on target audiences – a promising field for investments.