unveiled its “Ultium Drive” on Wednesday. It sounds high-tech, but it’s not science fiction. Ultium is a solution for today’s electric car market and forms a set of five interchangeable drives and three electric motors that help GM achieve its goal of becoming an all-EV carmaker down the road.
General Motors (ticker: GM) has been generating a lot of news around its alternative fuel platforms recently. Still, investors do not see the company as an EV leader. The stock is trading at approximately 6 times the estimated earnings in 2023. Stock in EV behemoth
(TSLA), on the other hand, trades for approx. 50 times estimated 2023 earnings. However, it is a better idea to compare GM and Tesla earnings further into the future because Tesla is growing faster than GM.
GM management is working hard to change perceptions. The company hosted a battery technology day earlier in 2020, announcing its designs and targeted 400 miles on a single charge. It is better than average. Tesla is the only manufacturer of electric cars with a model that can travel 400 miles without recharging, according to government tests.
In July, GM announced plans to build fast-charging stations for electric cars that partner with EVgo.
Recent news and the success of EV companies in 2020 have led Wall Street analysts to speculate on whether GM should split its electric vehicle business into a separate company. It could act on a higher multiple and not have problems with a legacy internal combustion engine attached to it.
GM management has not said anything definitive and keeps its choice. However, the idea of GM as an EV company got another boost in early September after
(NKLA) chose it to supply battery and fuel cell technology for the startup’s upcoming heavy trucks with alternative fuels.
The GM share has risen by approx. 7% since this announcement. However, Nikola shares have fallen by approx. 8%. The Nikola share has recently been hit by a brief seller report from Hindenburg Research.
“GM has built transmissions for many notable automakers,” said Ken Morris, vice president of autonomous and electric vehicle programs, in the company’s press release. “Manufacturing engines, transmissions, driveline components and systems are among GM’s most well-known competencies, and our production expertise is not only transferable, but also advantageous when we switch to EVs.”
His statement sounds like another step in transforming GM into not just an EV company, but an EV supplier.
GM stock rose 1.1% to nearly $ 32 per share. Stock Wednesday afternoon. That
Dow Jones industrial average
increased by 0.5% and 0.93%, respectively.
So far, GM shares have fallen by approx. 13%. EV sharesBarrons the tracks increase by almost 400% on average.
Write to Al Root at email@example.com