Back to top

Image: Bigstock

General Motors Postpones $330M Investment in Thacker Pass Project

Read MoreHide Full Article

General Motors Company (GM - Free Report) has agreed to postpone an additional $330 million investment in Lithium Americas Corp. (LAC - Free Report) , a Canada-based mining corporation, until the end of the year. 

In January 2023, the legendary automaker announced a $650 million investment in Lithium Americas to assist the miner in developing Thacker Pass, the largest Measured and Indicated lithium resource in North America, which has enough lithium to produce one million electric vehicles annually. The first part of this two-tranche investment was completed in February 2023. 

Lithium Americas was considering alternative structures for the second part of the investment and extended the deal closure date to Dec. 20, 2024. If the deal isn't closed by then, Lithium Americas will need to grant additional rights to General Motors. The conditions for the second part of the investment include the successful execution of a $2.26 billion loan agreement with the U.S. Department of Energy (DOE) under the Advanced Technology Vehicles Manufacturing Loan Program, for which the DOE has provided a conditional commitment. LAC continues to work closely with the DOE and anticipates completing both the DOE loan and the additional GM investment by the end of the year.

General Motors aims to achieve improved sales and profitability in its EV business by reducing battery costs, introducing new models and scaling expansion. GM expects EVs to achieve variable profit by the fourth quarter of 2024. The firm’s modular battery platform, the Ultium Drive system, is aiding the company’s e-mobility goals. GM’s battery plants in Ohio, Tennessee and Lansing are likely to scale up its e-mobility prowess. 

The launch of Ultium Charge 360, aimed at improving the charging experience, also bodes well. Besides the Ultium platform, which is set to rev up its electrification capabilities, GM’s Ultifi platform seeks to enable the firm to achieve leadership in software and services. GM’s existing and upcoming EV offerings, including Cadillac Celestiq, Chevrolet Silverado EV, Cadillac Escalade IQ, Chevrolet Blazer EV, Chevrolet Equinox EV, Cadillac Lyric, GMC Hummer EV SUV and pickup, GMC Sierra EV, Cadillac Optiq and BrightDrop Zevo, are expected to drive the company’s EV momentum.

Zacks Rank & Other Key Picks

GM currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the auto space are Dorman Products, Inc. (DORM - Free Report) and Douglas Dynamics, Inc. (PLOW - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for PLOW’s 2024 earnings suggests year-over-year growth of 60.4%. EPS estimates for 2024 have improved 15 cents in the past 60 days.

Published in