General Motors GM and Honda engine HMC recently announced that it will deepen its ties to co-develop a series of affordable electric vehicles (EVs) structured on a new global framework using advanced Ultium battery technology. The collaboration promises to create new value for consumers and redefine the experience of owning an electric vehicle.
The companies are focusing on mass production of electric vehicles from 2027, including compact crossovers, with the segment being the largest in the world, with annual volumes of more than 13 million vehicles. The joint initiative will leverage the technology, design and supply strategies of both companies. The partnership is to make an all-electric product for North America at a lower price than the upcoming Chevrolet Equinox EV. GM and Honda will also collaborate to reduce the cost of electrification and improve the performance and durability of future vehicles.
General Motors is targeting 2 million EV production capacity by the end of 2025. GM is already working to accelerate technologies such as lithium-metal, silicon and solid-state batteries to improve battery cell manufacturing processes. It has pledged to achieve carbon neutrality in its global products and operations by 2040 and to eliminate tailpipe emissions from light-duty vehicles in the United States by 2035. The new project is synchronous with its goals.
Honda is also stepping up its efforts in solid-state battery technology and has established a demonstration line in Japan in this regard.
Collaborative efforts between GM and Honda have come a long way, with several projects in recent years targeting electric vehicle and autonomous vehicle (AV) technologies. They worked on next-generation fuel cell system and hydrogen storage technologies and GM’s EV battery module development efforts. In 2020, GM and Honda announced plans to co-build two electric vehicles, including the Honda Prologue, which will be unveiled in early 2024, followed by Acura’s first electric SUV. Additionally, the companies are teaming up to develop the Cruise Origin, one of the first complete AV vehicles designed for driverless delivery.
Zacks ranking and key picks
GM and HMC currently have Zacks rank #3 (Hold).
Top-ranked players in the automotive space include Harley-Davidson PIG and You’re here TSLA, each sporting a Zacks rank No. 1 (Strong Buy), currently. You can see the full list of today’s Zacks #1 Rank stocks here.
Harley-Davidson has an expected profit growth rate of 2.2% for the current year. Zacks’ consensus estimate for its current-year earnings has been revised up about 27% in the past 60 days.
Harley-Davison’s earnings have exceeded Zacks’ consensus estimate for the past four quarters. HOG has realized a surprise on earnings for the last four quarters of 77.6% on average. The stock has lost 9.2% over the past year.
Tesla has an expected profit growth rate of 42.3% for the current year. The Zacks consensus estimate for current-year earnings has been revised up about 4.4% in the past 60 days.
Tesla’s earnings have exceeded Zacks’ consensus estimate for the past four quarters. TSLA has realized a surprise on earnings for the last four quarters of 33.3% on average. The stock is up 62.7% over the past year.
Zacks names ‘only one best choice for doubling up’
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This company could rival or surpass other recent Zacks stocks that are expected to double, such as Boston Beer Company which jumped +143.0% in just over 9 months and NVIDIA which jumped +175.9% in one. year.
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