Detroit and Germany Already Have Their Own Teslas
Volkswagen and GM are spending vast sums on electric car ventures. Why not spin them off as separate companies to make sure they’re properly valued?
More than a million a year.
Photographer: Sean Gallup/Getty Images EuropeWhen finance types talk about internal combustion engines, they often just use the abbreviation ICE. It’s an appropriate name: Investors have a frosty view of car companies that depend on petrol or diesel to power their vehicles.
Volkswagen AG, the world’s biggest auto maker by sales, has a market value of 73 billion euros ($87 billion), or about 6.5 times the earnings it generated last year. By contrast, Tesla Inc.’s all-electric lineup has propelled it to an astonishing $352 billion valuation even though its profits are tiny. Budding Teslas such as Rivian Automotive Inc. and Nikola Corp. have achieved multi-billion dollar valuations before even delivering their first electric vehicles.