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General Motors (GM), POSCO to Invest in Quebec Battery Unit
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General Motors (GM - Free Report) and POSCO Chemical, have recently set up their joint venture, Ultium CAM to build a plant in Quebec, Canada for the production of high-nickel cathode active materials.
General Motors will get supply of the key electric vehicle (EV) component from POSCO, which will in turn gain a big push in its EV business. The project has an investment of $327 million earmarked. Per the contract, the plant will produce 30,000 tons of the cathode active materials per year to be used by 220,000 EVs with an initial investment of $327 million. Construction is slated to begin in August and expected to be completed by 2024.
Along with the joint venture, there will also be a eight-year contract per which high-nickel cathode-active materials manufactured at the Quebec site will be supplied to Ultium Cells, a battery joint venture between GM and LG Energy Solution, from 2025. Both POSCO and General Motors are set for a long-run momentum in the EV space.
GM has ambitious investment plans to propel the company in the EV space. In January, GM announced a $7 billion investment plan in four Michigan manufacturing sites to create 4,000 new jobs and retain 1,000 jobs, as well as bolster battery cell and electric truck manufacturing capacity. GM's $35 billion investment pledge in EV in 2021 and autonomous vehicles through 2025 is also aiding two more sites in Spring Hill, TN, and Ingersoll, ON, to switch to all-electric manufacturing. Its $750 million investment to enhance charging capacity for residences, workplaces and public areas through 2025 also bode well.
POSCO Chemical considers the recent project as a springboard to propel its supply chain of core battery materials in North America, an area that is witnessing a rapid expansion of EVs.
Shares of GM have declined 34.9% over the past year compared with its industry's 13.7% decline.
Fox Factory has an expected earnings growth rate of 14.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1% upwards in the past 30 days.
Fox Factory’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. FOXF pulled off a trailing four-quarter earnings surprise of 10.18%, on average. The stock has declined 29.4% over the past year.
Genuine Parts has an expected earnings growth rate of 13.6% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.5% upwards in the past 30 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of 11.34%, on average. The stock has risen 6.1% over the past year.
Standard Motor has an expected earnings growth rate of 2% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 2.2% upwards in the past 30 days.
Standard Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 40.34%, on average. The stock has declined 13.2% over the past year.
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General Motors (GM), POSCO to Invest in Quebec Battery Unit
General Motors (GM - Free Report) and POSCO Chemical, have recently set up their joint venture, Ultium CAM to build a plant in Quebec, Canada for the production of high-nickel cathode active materials.
General Motors will get supply of the key electric vehicle (EV) component from POSCO, which will in turn gain a big push in its EV business. The project has an investment of $327 million earmarked. Per the contract, the plant will produce 30,000 tons of the cathode active materials per year to be used by 220,000 EVs with an initial investment of $327 million. Construction is slated to begin in August and expected to be completed by 2024.
Along with the joint venture, there will also be a eight-year contract per which high-nickel cathode-active materials manufactured at the Quebec site will be supplied to Ultium Cells, a battery joint venture between GM and LG Energy Solution, from 2025. Both POSCO and General Motors are set for a long-run momentum in the EV space.
GM has ambitious investment plans to propel the company in the EV space. In January, GM announced a $7 billion investment plan in four Michigan manufacturing sites to create 4,000 new jobs and retain 1,000 jobs, as well as bolster battery cell and electric truck manufacturing capacity. GM's $35 billion investment pledge in EV in 2021 and autonomous vehicles through 2025 is also aiding two more sites in Spring Hill, TN, and Ingersoll, ON, to switch to all-electric manufacturing. Its $750 million investment to enhance charging capacity for residences, workplaces and public areas through 2025 also bode well.
POSCO Chemical considers the recent project as a springboard to propel its supply chain of core battery materials in North America, an area that is witnessing a rapid expansion of EVs.
Shares of GM have declined 34.9% over the past year compared with its industry's 13.7% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
GM currently carries a Zacks Rank #3 (Hold).
Better-ranked players in the auto space include Fox Factory Holdings (FOXF - Free Report) , Genuine Parts Company (GPC - Free Report) and Standard Motor Products (SMP - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has an expected earnings growth rate of 14.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1% upwards in the past 30 days.
Fox Factory’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. FOXF pulled off a trailing four-quarter earnings surprise of 10.18%, on average. The stock has declined 29.4% over the past year.
Genuine Parts has an expected earnings growth rate of 13.6% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.5% upwards in the past 30 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of 11.34%, on average. The stock has risen 6.1% over the past year.
Standard Motor has an expected earnings growth rate of 2% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 2.2% upwards in the past 30 days.
Standard Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 40.34%, on average. The stock has declined 13.2% over the past year.