Revving Up For The Future: General Motors' EV Portfolio And Vertical Battery Chain To Drive Growth, Analyst says

Mizuho analyst Vijay Rakesh initiated coverage on General Motors Company GM with a Neutral rating and a price target of $39.
The analyst applauds the company's consumer-commercial Electric Vehicle portfolio, which has an ambitious ramp of two million units per year globally by 2025. The company is expected to launch 30 new EVs globally by 2025.
The company is ramping EVs in North America from 45,000 to one million units from 2022-2025, at a 200% CAGR.
This apart, the company's multiple secular vectors with Advanced Driver Assistance Systems, or ADAS, Cruise Automation, and vertical battery supply chain via Ultium are expected to aid growth.
New Vectors with Cruise ADAS target revenue generation of $50 billion by 2030, with Robotaxis, L3+, and other Content/Roadside Services.
General Motors is also vertically integrating its battery supply chain with its Ultium platform, which could help lower costs and improve efficiency as it scales EV longer-term.
The company is targeting battery cell costs reaching ~$87/kWh by 2025, down from ~$124/kWh today.
During its planned ramp to the production capacity of one million EVs in North America by 2025, the company expects to see capex increase to $11 billion to $13 billion per year for 2023- 2025, as it transitions lines from ICE to EV and ramps battery production.
However, the analyst cautions on slower growth globally, coupled with the softer consumer and ramp of low-margin EVs, which are expected to lead to broadly lower margins in the near term.
Also Read: Tesla Shocks Auto Industry: Drives Past Mercedes-Benz, Toyota To Become World's Most Valuable Auto Brand
Price Action: GM shares traded lower by 0.13% at $34.58 on the last check Thursday.

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