General Motors (GM) has inked a strategic collaboration with Controlled Thermal Resources (CTR) as it seeks to accelerate the development of affordable and higher mileage electric vehicles. As part of the collaboration, the automaker has secured local and low-cost lithium supplies.
The automaker is on course to become the first company to make a multi-million dollar investment in CTR’s Hell’s Kitchen project. The investment will allow CTR to recover lithium from geothermal brine. In return, GM will have the “first rights” to any Lithium produced from the Hell’s Kitchen project’s “first stage”, which could lead to a multi-year relationship. (See General Motors stock chart on TipRanks)
The lithium in question is to be produced through the “closed-loop, direct extraction process”, leading to lower CO2 emissions.
“By securing and localizing the lithium supply chain in the U.S., we’re helping ensure our ability to make powerful, affordable, high mileage EVs while also helping to mitigate environmental impact and bring more low-cost lithium to the market as a whole. GM looks forward to working with CTR, in addition to state and local leaders, in achieving these goals,” said Doug Parks, GM Global Product Development, Purchasing, and Supply Chain Executive Vice President.
The Hell’s Kitchen Project is poised to start generating lithium in 2024, expected to help GM on its push to curb tailpipe emissions from light-duty vehicles by 2035.
Last month, Morgan Stanley analyst Adam Jonas reiterated a Buy rating on the stock with an $80 price target implying 35.69% upside potential to current levels. The Buy rating comes on the back of the automaker committing $35 billion to electric vehicles (EV) and automated vehicles (AV). The analyst is projecting GM’s EV business to be worth $72 per share before discount, with the company also on course to generate $10 in earnings per share or more.
Consensus among analysts is a Strong Buy based on 13 Buys and 1 Hold. The average General Motors price target of $72.93 implies 23.69% upside potential to current levels.
GM scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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