Auto giant General Motors (GM) has plans to build a coast-to-coast electric vehicle (EV) fast charging network in the U.S. and will partner with travel center operator, Pilot Travel Centers, and EV charging station service provider, EVgo (EVGO).
In addition to the investment from the companies, the project is also expected to benefit from a government grant.
Although GM has traditionally produced gas-powered vehicles under various brands, the company is making the switch to electric models. GM is already converting some of its gas-powered vehicle brands into EV models.
A Network of 2,000 Fast Charging Stalls
GM and its partners aim to build a network of 2,000 EV charging stalls that will be located at Pilot’s travel centers. They plan to make the charging stations open to all EV brands, which would make it easier for drivers to re-energize their cars along highways. The chargers will be set up at 50-mile intervals. Pilot will host the chargers at its travel centers, and EVgo will maintain them.
Funding for GM’s EV Charging Project
GM plans to invest nearly $750 million to build an extensive EV charging infrastructure. The joint charging network project is part of that infrastructure investment. Meanwhile, Pilot plans to invest $1 billion to upgrade its travel centers.
The U.S. government is also expected to chip in with financial support for the project. The government is providing $5 billion toward EV charging projects as part of an effort to encourage EV adoption. As it pushes to have 50% of new vehicle sales in the U.S. be new-energy models by 2030, the Joe Biden administration is working toward building 500,000 EV charging stations across the country.
Wall Street Is Cautiously Optimistic about GM
On July 14, Morgan Stanley analyst Adam Jonas maintained a Hold rating on GM stock but lowered the price target to $42 from $44, which implies more than 33% upside potential.
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating, based on 12 Buys, two Holds, and one Sell. The average GM price target of $54.40 implies 72% upside potential to current levels. Meanwhile, GM shares have declined 48% year-to-date.
Hedge Funds Are Buying GM Stock
TipRanks’ Hedge Fund Trading Activity tool shows that confidence in GM is currently Positive, as 25 hedge funds increased their cumulative holdings of the stock by 2.3 million shares in the last quarter.
Key Takeaway for Investors
Although GM has a significant share of the gas-powered vehicle market, it lags far behind Tesla (TSLA) in the EV market. Tesla has its own global charging stations that serve its customers. GM needs the kind of partnership it has struck with Pilot and EVgo to rapidly build the infrastructure that will support its EV business as it works to catch up to Tesla and other competitors.
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