General Motors
GM
plans to commence production of its upcoming Chevy Silverado electric pickup in early 2023 with sales set to begin in late 2023. Production will begin at the recently inaugurated Factory Zero in Michigan, previously known as Detroit-Hamtramck.
The Silverado electric vehicle (“EV”) will be the second electric truck for the Detroit, MI auto biggie after the GMC Hummer EV, which is anticipated to be delivered to a handful of customers before the end of 2021. When released, the electric Silverado will be one of the flagship offerings of General Motors, besides being the first electric truck for the automaker’s Chevy brand.
General Motors also confirmed that the Chevy Silverado EV will be followed by several other EVs throughout 2023, including the GMC Sierra E pickup truck.
The Chevy Silverado EV will be built on General Motors’ Ultium battery pack and the all-electric drivetrain. The company claims that the Silverado will offer a range-per-charge of around 400 miles. The pickup will be available in both consumer and fleet versions. Other specifications include 24-inch wheels and a four-wheel steering, giving the truck greater agility and tighter turning radius at low speeds, plus enhanced handling and stability at higher speeds. The automaker has also confirmed that the truck will also feature a fixed-glass roof, a first for its full-size pickup brand.
General Motors Enters Into Key Supply Deal With MP Materials
In a separate development, General Motors has recently entered into a strategic collaboration with MP Materials to develop a fully integrated U.S. supply chain for rare earth magnets.
Neodymium-iron-boron (NdFeB) magnets are essential inputs for EV motors. However, there is virtually no domestic capacity to produce NdFeB magnets today.
Per the agreement, MP Materials – which operates the only rare earth materials mine in North America – will supply U.S.-sourced and manufactured rare earth materials, alloy and finished magnets for the electric motors used in the GMC HUMMER EV, Cadillac LYRIQ, Chevrolet Silverado EV and more than a dozen models using General Motors’ Ultium platform.
The latest alliance seeks to aggravate the restoration of the U.S.-based rare earth supply chain at scale, having high sustainability and resilience. MP Material’s domestic supply chain, spanning California and Texas, will provide an unconstrained supply of NdFeB magnets. Further, to enhance efficiency and sustainability, waste generated during MP Material’s rare earth alloy and magnet manufacturing will be recycled back into the process.
The deal with MP Materials will aid GM in building a sustainable and resilient U.S.-based supply chain for EVs, encompassing the entire ecosystem from raw materials to battery cell manufacturing to electric drive motors and beyond. Accelerating the production of materials used in EVs will help the automaker fortify its U.S. manufacturing foothold of EVs, bring down the cost of EVs and, in turn, speed up the domestic adoption of EVs. Moreover, it will bolster General Motors’ ability to make powerful, affordable and high-mileage EVs.
Further, the alliance with MP Materials is another bold stride that will help ensure that General Motors reaches its goal to lead the EV industry in North America.
EV Push by GM
With aggravating climate change concerns, investors are intrigued by automakers that provide green transportation solutions. Thus, automakers around the world are leaving no stone unturned to step up their EV game. Amid this intensified competition, General Motors’ big push toward EVs is commendable. The automaker has committed to invest $35 billion in EVs and autonomous vehicles by the end of 2025, marking a 75% jump from its initial $20-billion plan. The automaker also plans to introduce more than 30 EV models globally by 2025, with more than two-thirds available in the United States. The carmaker aspires to achieve more than 1 million annual global EV sales by 2025.
At the heart of its EV strategy lies General Motors’ Ultium battery platform, which will power everything from mass market to high-performance vehicles. The company aims to bring first-generation Ultium cell costs 40% lower than those used in the Chevrolet Bolt EV and double the energy density at 60% lower cost in the second generation cells.
The company’s years of expertise and skill in electric drive system development are aiding it in transitioning quickly from conventional vehicles to EVs. The Ultium Drive components will allow the company to ramp up EV production more quickly and adjust the production mix to cater to the rising market demand. Moreover, the company’s vertical integration in the EV space, incorporating both hardware and software, has helped take its EV game a notch higher, lending it a significant competitive advantage over its peers. Ultimately, the auto biggie wants to boost EV revenues from about $10 billion in 2023 to approximately $90 billion annually by 2030.
General Motors currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Auto Companies to Tap Into
A few better-ranked stocks in the auto space include
Goodyear Tire
GT
,
Tesla
TSLA
and
Harley-Davidson
HOG
, all of which flaunt a Zacks Rank of 1.
Goodyear has an expected earnings growth rate of 196.86% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 20 cents over the last 30 days.
Goodyear beat the Zacks Consensus Estimate for earnings in the last four quarters. GT has a trailing four-quarter earnings surprise of 228.45%, on average. Its shares have rallied 115.6% over the past year.
Tesla has an expected earnings growth rate of 166.96% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 66 cents over the last 60 days.
Tesla beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. TSLA has a trailing four-quarter earnings surprise of 25.38%, on average. Its shares have rallied 64.6% over the past year.
Harley-Davidson has an expected earnings growth rate of 34.92% for the current quarter. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 2 cents over the last 30 days.
Harley-Davidson beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. HOG has a trailing four-quarter negative earnings surprise of 138.45%, on average. Its shares have dropped around 2.8% over the past year.
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