German automaker Volkswagen AG (DE:VOW) and Groupe Renault (FR:RNO) from France are reportedly in early discussions to collaborate on developing an affordable EV (electric vehicle) model. The German newspaper Handelsblatt stated that Volkswagen is exploring partnerships on a platform for a car with a target price of under €20,000, which is anticipated to debut in 2026.
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Volkswagen (VW) is a distinguished luxury car manufacturer, holding ownership of brands like Volkswagen, Skoda, Audi, Bentley, Ducati, and Lamborghini.
Breaking the China Dominance
Carmakers in Europe, the second-largest EV market in the world, are witnessing a slowdown in EV sales, hit by cheaper models from China. With more and more Chinese automakers gaining market share in the European market, the local giants are shifting into high gear.
With this partnership, Volkswagen and Groupe Renault aim to disrupt the dominance of premium-priced electric models and increase EV adoption among a broader consumer base. Moreover, this partnership could lead to huge synergies by leveraging Volkswagen’s engineering expertise and Renault’s electric technology.
According to the report, Renault highlighted that such a partnership is the need of the hour to remain competitive in the market. It added that it is in various discussions, but “nothing has been finalized.”
Is Volkswagen Shares a Good Buy?
Year-to-date, Volkswagen’s stock has lost almost 20% of its value, mainly due to margin pressures and profit warnings. The company reduced its profit margin forecast for FY23, projecting an operating margin in the range of 7.0% to 7.3%, down from the prior range of 7.5% to 8.5%.
According to TipRanks’ consensus, VOW stock has received a Moderate Buy rating based on recommendations from nine analysts. This includes six Buy and three Hold recommendations. The Volkswagen share price forecast is €140.4, which is 12.35% higher than the current price level.
