Volkswagen Denies Rumours of Investment in Tesla
Finance, Markets

Volkswagen Denies Rumours of Investment in Tesla 

Last updated on September 9th, 2020

Germany’s automobile giant, Volkswagen, recently denied all rumours about investing in Tesla, the US electric car maker.

Pietro Zollino, Volkswagen’s spokesman, commented on a report in German magazine Manager Magazin, which listed that Herbert Diess, CEO of Volkswagen, is eyeing Tesla. He clarified, “It’s completely unfounded and pure speculation.”

Last year, Tesla CEO Elon Musk expressed his intention to take Tesla away from the scrutiny of public shareholders. This raised doubt in people that the electric car maker Tesla will be absorbed by a larger company like Apple. Volkswagen, however, is a better contender for the purchase.

Manager Magazin showed a report to prove Volkswagen’s interest, claiming that Diess thought Volkswagen could benefit a lot from Tesla’s expertise in batteries and software.

A credible source recently reported that Volkswagen would immediately get on board if it could. He added even though cash is at hand, getting approval from major shareholders could be tough. Nearly 52% majority of Volkswagen is owned by the Porsche family, followed by the 20% German state of Lower Saxony.

After the report by Manager Magazin, it is stated that Tesla’s stock increased at a great rate.

Another banker who claimed that he closely understood the ideation of Diess confirmed his thinking. However, he affirmed at the current market value of nearly $40 billion, it would be too expensive to buy Tesla. There are speculations that Tesla has always rebuffed the efforts of Volkswagen’s efforts of an alliance. 

As reported by the magazine, the two CEOs meet each other twice a year and Diess constantly reminds his staff of the advantages that Elon Musk has over traditional automakers.

Following Volkswagen’s denial of the magazine report, Tesla shares matched pre-market gains. At 1335 GMT, they were up 1.3% at $223.60, while Volkswagen’s shares were up by 1.2% at 144.36 euros.

With the idea of expanding its electric sector, Volkswagen recently announced its plans to team up with Ford. The two firms will collaborate on electric and self-driving cars. They announced their intentions to continue targeting more areas where they can work together on electric vehicles in order to accelerate affordable and sustainable movement for their customers.

Volkswagen has announced about its future plans with reference to the electric sector. At the FT Future of the Car Summit in London, Thomas Ulbrich, VW’s head of electric vehicles said, “Our decisions are done. Our planning is in progress. We will have the ID 3 here in the middle of next year. There will be 70 new fully electric VWs by 2028; an investment of €30 billion in e-mobility by 2023; 22 million EV sales for the VW Group by 2028.”

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