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Robots work on an electric car ID.3 body at the assembly line at the plant of Volkswagen AG (VW) in Zwickau, Germany on Feb. 25, 2020.

Jens Meyer/The Associated Press

Volkswagen expects to double electric vehicle deliveries and increase profits for its core brand this year after the world’s second-largest carmaker stepped up its switch to fully electric vehicles.

The brand will deliver more than 450,000 electric cars this year, the company said on Wednesday. Volkswagen is targeting 1 million electric vehicle deliveries for the wider group.

The core brand is aiming for a significant year-on-year increase in sales revenue and an increase in profits, VW said.

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The group’s preferred stock rose as much as 7% to its highest since June 2015, as institutional and retail investors cheered VW’s efforts to overtake Tesla in the electric car market.

Volkswagen earlier this month unveiled its ‘Accelerate’ strategy for its main brand, saying it expected fully electric vehicles to account for more than 70% of total European vehicle sales by 2030, compared with a previous target of 35%.

The Volkswagen brand aims to invest 16 billion euros ($19 billion) in electrification and digitalisation by 2025.

To help finance the investment, it aims to reduce fixed costs by 5% by 2023, freeze headcount at January 2021 levels, boost productivity at its plants by 5% a year and reduce raw material costs by 7%.

The new strategy would generate hundreds of millions of euros in revenue in the coming years, it said.

The group’s stock has doubled in value in just four months, giving Volkswagen a market capitalisation of more than 130 billion euros on Wednesday.

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