General Motors (NYSE:GM) is aggressively transitioning towards an all-electric future. While EVs (Electric Vehicles) provide significant growth opportunities for GM, the lower-than-expected output of its electric GMC Hummer pickup truck and Cadillac Lyriq SUV is a cause for concern. Nonetheless, the expected ramp-up in production in 2023 could give a significant lift to its stock.
EVs Rolling Out Slowly
A Wall Street Journal report highlighted that the automaker began production of its electric GMC Hummer pickup truck about 15 months ago. However, its production is off to a slow start, as it has been manufacturing only a dozen vehicles a day, which is way less than what it should have achieved by now. Moreover, the Cadillac Lyriq SUV is also experiencing a slow ramp-up.
While GM is witnessing solid demand for its EVs, the slow output is chipping away at its market share in the EV space. The company sold roughly 1,000 Lyriqs in one year. In comparison, the WSJ report highlighted that EV giant Tesla (NASDAQ:TSLA) sold 252,000 Model Ys in the past year.
Management Remains Upbeat
It’s worth highlighting that GM’s CEO, Mary Barra, termed 2023 a breakout year and expects to achieve EV profitability by 2025. Barra is confident that the opening of the Spring Hill plant later this year and steady progress in production at its Ultium Cells joint venture in Ohio will help meet the pent-up demand for Cadillac Lyriq and will keep GMC Hummer production on track.
The company announced that it is on course to produce 400,000 EVs in North America between 2022 and mid-2024 with the Ultium platform. Moreover, volumes will likely increase significantly in the second half of this year.
What is the Prediction for GM stock?
While the slow progress of its EVs is a concern, Wall Street is cautiously optimistic about GM stock. Ivan Feinseth of Tigress Financial is bullish about GM as the company continues to witness strong demand for its full-size SUVs and pickup trucks.
Feinseth believes GM is poised to create significant value for its shareholders due to the expected ramp-up in EV production and the introduction of its software-defined capabilities and connected vehicles.
GM stock has received seven Buy and four Hold recommendations for a Moderate Buy consensus rating. Further, analysts’ average price target of $53.45 implies 34.43% upside potential over the next 12 months.
