Market News

GM Bets on New Organization in EV Race

General Motors (GM) has formed a new corporate group that will focus on driving revenue growth across its brands and help strengthen the company’s position in the auto market. The group, Commercial Growth Strategies and Operations, will be headed by Chevrolet boss Steve Hill.

The group’s mandate also includes assessing future business opportunities. GM has placed its fleet, U.S. sales operations, and electric vehicle (EV) retail innovation teams under the new organization.

The automaker has announced some executive changes in connection with the new organization. It has tapped Scott Bell, the head of its Canada business, to replace Steve Hill at Chevrolet. The company is sending Marissa West, who has been an executive chief engineer in its truck and van category, to Canada to replace Bell. The changes take effect on April 1.

GM Increasing EV Investment Amid Soaring Demand 

Global EV sales more than doubled to 6.3 million units in 2021. S&P Global Platts Analytics predicts that sales will hit 26.8 million units by 2030. Tesla (TSLA) currently dominates the EV market, with 14% share, according to Canalys, followed by Volkswagen  (VWAGY) with 12% market share. Chinese automaker SAIC, a GM joint venture partner, has 11% market share. 

GM has said it plans to accelerate its EV launches. As a result, the automaker intends to invest more than $35 billion in its EV business through 2025, according to a Reuters report. In the near-term, GM is willing to prioritize investments in EV technology over profits. Hill, who will lead GM’s new organization, oversaw several EV projects at Chevrolet.

Wall Street’s Take

On March 28, Citigroup analyst Itay Michaeli maintained a Buy rating on General Motors but lowered the price target to $95 from $100. Michaeli’s new price target indicates 114.8% upside potential. The analyst noted that recent pricing data points are encouraging, and that GM can achieve its 2022 earnings before interest and taxes (EBIT) outlook. However, Michaeli cautioned that income from GM’s China joint venture may be modestly lower and that North American production may also drop.

Consensus among analysts is a Strong Buy based on 12 Buys and four Holds. The average General Motors price target stands at $73.13 and implies upside potential of 56.9% to current levels. Shares have declined 28% year-to-date.

Blogger Opinions

TipRanks data shows that financial blogger opinions are 98% Bullish on GM, compared to a sector average of 69%.

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