Volkswagen becomes Germany’s most valuable blue-chip

Volkswagen overtook software maker SAP on Wednesday to become the most valuable company in Germany’s blue-chip DAX index, as investors are optimistic about the automaker’s plans to take on Tesla.

On Wednesday, Volkswagen shares boosted as much as 12%, giving the company a market valuation of more than 136 billion euros ($162 billion), compared with SAP’s 127 billion.

Volkswagen shares have gained 47% year-to-date, supported by a series of announcements on its electric vehicle expansion strategy, which culminated in a “Power Day” this week including plans to construct six gigafactories in Europe by 2030.

CEO Herbert Diess said on Tuesday he thought Volkswagen was worth 200 billion euros ($239 billion), which is still far from Tesla’s market value at $650 billion.