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UBS analysts, led by Patrick Hummel, have stated that Tesla and Volkswagen will be the most profitable companies in the electric car field in the coming years. UBS points out in its statement to investors that software algorithms are the key to high profits.
In the analysis, although both companies have the highest profits, UBS predicts that the difference in profits between the two will be significant. In the 2025 market for pure electric vehicles, Tesla’s sales are expected to reach 2.3 million units, while Volkswagen is expected to reach 2.6 million units. However, Tesla’s profits are expected to far exceed Volkswagen’s, with Volkswagen’s estimated at $7 billion and Tesla’s at three times that at $20 billion.
In Tesla’s $20 billion profit, 45%, or $9 billion, will come from self-driving services in the software. Currently, Tesla’s optional price for FSD assisted driving software in North America is $10,000, and all models can be equipped with the same hardware. Volkswagen’s first autonomous driving vehicle, the ID.BUZZ, has been delayed in mass production plans and has not yet formed software revenues.
As a representative of traditional automakers’ transformation, Volkswagen has shown great determination to transform, but compared with Tesla, Volkswagen’s gap in software (especially autonomous driving) is too large. The success of their transformation strategies can only be confirmed by time.
🔗 Source: Teslarati
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.