When you think of electric vehicles, the first thing that comes to mind is likely a Tesla. 

Of course, Tesla has done a great job with its marketing efforts. 

Those efforts have successfully driven Tesla into its leadership position for the entire EV market, with its vehicles making up over 64% of all EVs on the road in the United States. 

Sure enough, there are plenty of other EV makers out there, many of which are pivoting from classic combustion engine vehicles. 

The next runner-up is Ford with around a 7.5% share of the US market. 

And the slices of the pie just get smaller from there. 

That being said, automakers have a lot of work cut out for them if they want to capture a larger share of this rapidly growing industry. 

Especially with something like cars, most car buyers find a brand they like and stick with it forever. 

Either way, the work is being done… Almost every major automaker either already has one or more production model EVs or has something in the works. 

And while many are behind the curve when it comes to Tesla, analysts expect Tesla's market share to recede as legacy automakers and EV startups such as Rivian ramp production. 

However, the company's sales leadership is likely to remain as Tesla continues to prove itself as a difficult rival to dislodge. 

Part of Tesla’s success has to do with its first-mover advantage since it was one of the first brands to offer truly aspirational EVs to early adopters.

But that’s not stopping other legacy automakers from dropping hundreds of billions of dollars into EV advancements and related technologies. 

The latest company to announce an EV spending spree? Volkswagen AG. 

Spending Spree for EVs

In its latest effort to bolster its struggling business, automaker Volkswagen is planning to spend nearly $200 billion over the next five years. 

Most of that spending is going to go towards EVs, around 68% of it to be exact, totaling around $131 billion cleared for EV development. 

For its planned expansion, VW has stated that it will be particularly focused on markets in China and the US. 

From The Wall Street Journal: 

The move is the first major strategy announcement by Chief Executive Oliver Blume since he took the reins at VW in September after the board ousted his predecessor, Herbert Diess. With the company’s new five-year investment plan, Mr. Blume is now starting a spending war with rival automakers as he tries to claw back market share in China and make the company’s U.S. business relevant after decades of failed attempts to build significant market share.

The big spending by Volkswagen—totaling 180 billion euros, equivalent to $193.2 billion—comes as governments around the world shell out subsidies to encourage companies to invest in technologies that speed up the transition away from greenhouse-gas-emitting fossil fuels. VW is relatively flush with cash after reaping billions of euros in proceeds from the listing of sports-car maker Porsche AG last year.

And this money isn’t just going to developing vehicles either, VW has also stated that it will be looking to build more battery plants outside of Europe in the coming years. 

Surely, these are some aggressive tactics that VW hopes will catapult it to a higher position on the EV food chain. 

Even still, spending money doesn’t magically fix a struggling business’s problems… We’ve seen that time and time again. 

And VW does have a few problems that need fixing… 

In China, VW’s single largest market, sales slid by about 41% in January, citing the market share that it lost to Tesla as a pressure point.

Moreover, VW’s EVs have generally underperformed expectations across a variety of markets.

Surely, competition is fierce right now and VW is going to need to step it up quite a bit if it wants to pull itself back into focus for would-be EV buyers. 

Of course, all of this goes to show just how big of an opportunity automakers see in the EV movement. 

Even though EVs don’t make up the lion’s share of cars on the road, the world’s largest automakers are spending cash left and right in an attempt to plant their flags in the space. 

And I don’t see this slowing down anytime soon… 

As EVs get more advanced and become cheaper and more widely available, there will be a major shift away from combustion engines in most cases. 

It’s not just a trend that’s happening with cars either, EV tech has plenty of room to grow into the public transit space as well. 

All-electric buses, trains, and even planes all become likely possibilities as the years go by and the technology becomes more advanced. 

And as tech investors, these movements provide us with plenty of opportunities to position ourselves for gains with the top dogs in the EV market. 

Even aside from Tesla, there are some great names out there that I believe will see some serious success as EVs make their way to center stage.

Now, before I go, I’d love to hear back from you about today’s topic. Are you planning on buying an EV in the next five years? If so, what brand are you most interested in? If not, why? Drop me a line and let me know here: feedback@technologyprofits.com