General Motors Co.
GM
and
Glencore
GLNCY
recently announced a multi-year sourcing agreement. Per the deal, Glencore will supply cobalt to GM from its Murrin Murrin operation in Australia to create sustainable supply chains. The cobalt will be used in GM’s Ultium battery cathodes, which will power electric vehicles (EVs) such as the Chevrolet Silverado EV, GMC HUMMER EV and Cadillac LYRIQ.
Both companies are members of the Responsible Minerals Initiative (“RMI”), and Glencore’s Murrin Murrin operation is compatible with the OECD-aligned Responsible Minerals Assurance Process.
Commodities like cobalt contribute greatly to de-carbonization. As Glencore is a leading producer, recycler and supplier of the element, GM will be able to leverage its experience and strive for reducing its carbon footprint in the transportation sector.
GM targets to build 1 million EVs in North America by the end of 2025. In this light it has come up with a series of initiatives to bolster its EV supply chain.
Some of them are a joint venture with POSCO Chemical to build a new facility in Quebec, Canada, to produce materials for GM’s Ultium batteries. It is also working to secure lithium produced by the first stage of its Hell’s Kitchen Project in California. It is allying with MP Materials to establish the first North American processing site for alloy flakes. It will collaborate with VAC Magnetics LLC, the largest producer of permanent magnets in the Western Hemisphere, to establish a North American base to support GM’s magnet requirements starting 2024.
General Motors’ big push toward EVs is commendable. The automaker plans to roll out 30 fresh EV models by 2025-end. Key launches, including the GMC Hummer EV and Cadillac Lyriq crossover EV, are expected to buoy top-line growth. GM’s Factory ZERO and plants in Spring Hill and CAMI are setting stage for the company’s electrification goals. GM’s Ultium Drive system and collaborations with Honda and EVgo are likely to scale up its e-mobility prowess. The BrightDrop venture, designed to offer an integrated ecosystem of electric first-to-last-mile products, is set to boost prospects. The launch of Ultium Charge 360, aimed at improving charging experience, also bodes well. Apart from Ultium platform which is set to rev up its electrification capabilities, GM’s Ultifi platform seeks to enable the firm achieve leadership in software and services.
GM’s shares have lost 31.5% over the past year compared with the
industry
’s 2.8% decline.
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Zacks Rank & Key Picks
GM currently carries a Zacks Rank #3 (Hold).
Better-ranked players in the auto space include
BRP Group, Inc.
DOOO
and
Tesla, Inc.
TSLA
, each sporting a Zacks Rank #1 (Strong Buy), currently. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
BRP Group has an expected earnings growth rate of 9.1% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.9% upward in the past 60 days.
BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 13% over the past year.
Tesla has an expected earnings growth rate of 44% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 4.4% upward in the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 33.3%, on average. The stock has risen 34.8% over the past year.
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