General Motors to Invest $3B to Produce All-Electric Vehicles
General Motors Company GM recently announced plans to make an investment of $3 billion to produce all-electric trucks, SUVs, and autonomous vehicles, in turn generating more than 2,200 jobs. It aims to spend $2.2 billion at its Detroit-Hamtramck assembly plant, in order to produce all-electric vehicles, while the remaining $800 million will be used in supplier tooling and other projects related to the launch of the electric trucks.
General Motors’ first all-electric truck will be a Hummer pick-up, with production scheduled to begin in late 2021, followed by the Cruise Origin electric self-driving vehicle.The Cruise Origin vehicle will be a six-person taxi for rideshares in and around urban areas with no steering wheel or gas pedal.
General Motors’ $2.3 billion joint venture with LG Chem to establish a battery-cell assembly plant in Lordstown, OH, will supply battery cells for the electric vehicles produced at Detroit-Hamtramck plant. The plant’s paint and body shops, and general assembly area will be upgraded with new machines, conveyors, controls and tooling.
The company has also announced plans to revive its 2010-failed model — Hummer Name — as an all-electric pickup truck, which will be sold as an individual model under the GMC brand.
Apart from this, the company has been increasing its capacity investment in emerging markets to boost global sales. It expects half of the global sales growth by 2030 from emerging markets. General Motors is trying to gain from growth of emerging countries through product launches and the Wuling plant. Also, the firm is undertaking several initiatives to make its vehicles more advanced, safer and fuel efficient. The automaker is focused on electric and autonomous vehicle development, in a bid to adapt to the changing dynamics and customer preferences. All the above-mentioned initiatives are likely to bolster the company’s prospects in the days ahead.
Zacks Rank and Stocks to Consider
General Motors currently carries a Zacks Rank #3 (Hold).The stock has underperformed the industry it belongs to over the past year. Its shares have depreciated 9.5% compared with the industry’s rise of 34.2%.
Some better-ranked stocks in the Auto-Tires-Trucks sector include Gentex Corporation GNTX, Tesla, Inc. TSLA and SPX Corporation SPXC, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Gentex Corporation has an estimated earnings growth rate of 7.32% for 2020. The company’s shares have appreciated 34.6% in a year’s time.
Tesla has a projected earnings growth rate of 6,460% for the ongoing year. Its shares have surged 87.6% over the past year.
SPX has an expected earnings growth rate of 8.09% for the current year. The stock has rallied 74% in the past year.
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