General Motors (NYSE:GM) is on the streets, looking to open a fourth battery plant in the U.S. as it plans to race ahead of Tesla (NASDAQ:TSLA) on Electric Vehicle (EV) sales. Currently, Tesla’s Model 3 is the best-selling EV in the U.S. after Elon Musk adopted a vertical integration strategy over the past decade.
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In 2020, General Motors initiated building out its North American supply base for EVs by constructing factories and securing deals for raw materials. This led to GM grabbing the second-highest position in Q1 where Tesla was leading.
Integrations Lowering Costs
GM is not only trying to embrace a vertical integration strategy but also opting to move upstream, wherein it is trying to secure access to the components and minerals required in battery making. From investing in a lithium mine to working alongside a maker of a critical battery material, GM is working on this goal from many angles.
Guidehouse Insights analyst Sam Abuelsamid, as reported by the Financial Times, said that GM has “absolutely been more aggressive than any other automakers aside from Tesla.”
Abuelsamid states that GM’s three battery plants (operating or building) have a combined capacity of around 125 gigawatt hours annually, which is almost 3.5 times what Tesla has in North America. Assuming GM cruises through the plans, he adds that “they can probably catch up and surpass Tesla’s North American volumes.”
What are the Best EV Stocks?
Of the 11 Wall Street Analysts covering GM stock, six have assigned a Buy while five rate a Hold, taking the average analyst consensus rating to Moderate Buy. Further, analysts’ 12-month average price target of $46.90 implies a 23.6% upside potential from current levels.
Last week, Morgan Stanley Analyst Adam Jonas reaffirmed his Buy rating on GM stock with a $38 price target marking a marginal 0.1% upside potential from current levels. The analyst notes that with almost 300 driverless autonomous vehicles (AV) running on the street from GM, the vehicle Cruise is one of the most advanced robotaxi services.
In early June, RBC Analyst Tom Narayan reaffirmed his Hold position on Ford, GM, Stellantis (NYSE:STLA) and Tesla. The rating came in after GM announced that it would be getting access to 12,00 Tesla Superchargers across North America from 2024. In the last week of May, Tesla and Ford also signed similar deals.
