GM Undergoing Re-Rating With Electric-Vehicle Foray In Mind: Wedbush Reiterates Bullish Thesis

General Motors Co.’s GM vertical integration capabilities and the conversion of its massive customer base to electric vehicles over the coming years represents a transformational opportunity for the legacy automaker, according to Wedbush Securities.

The GM Analyst: Wedbush analyst Daniel Ives maintained an “Outperform” rating on General Motors with a price target of $85 per share.

The GM Thesis: Ives, who has been a long-time Tesla Inc. TSLA bull, believes that GM’s EV transformation story heading into 2022 is starting to get recognized by Wall Street investors, with an electric-vehicle driven re-rating of the automaker’s stock currently in process.

Despite headwinds in the form of near-term supply and chip shortage issues, GM has a “golden opportunity” to ultimately convert 20% of its installed customer base to EVs by 2026 and covert over 50% of its customer base by 2030, as per the analyst.

“We believe in a bull case scenario GM's stock could hit $100 over the next 12 to 18 months as the EV vision begins to take shape,” Ives wrote in a research note.

GM is in a great position to take advantage of a $5 trillion market emerging over the next decade as the automaker develops “game-changing” battery technology under the Ultium Platform, Ives added.

See Also: GM Says It Can 'Absolutely' Catch Up With Tesla In US EV Market Share By 2025

Why It Matters: GM, known for its big trucks and sports utility vehicles, plans to spend $35 billion through 2025 to accelerate its switch to electric vehicles.

The Mary Barra-led automaker aims to have 40% of its U.S. portfolio to be battery electric vehicles by the end of 2025 and transition to an all-electric portfolio by 2035.

Apart from GM, legacy rivals such as Ford Motor Co. F and Volkswagen AG VWAGY are also setting aside more investments into electric vehicles as they play catch up in the market disrupted by Tesla.