General Motors (GM) to Mass Produce Battery Cells With LG Chem

General Motors Company GM recently announced its collaboration with LG Chem to mass produce battery cells, with a joint investment of $2.3 billion. The joint venture (JV) will establish a battery-cell assembly plant in Lordstown, OH, creating more than 1,100 new jobs. The plant is expected to be operational by mid-2020.

The company plans to use advanced manufacturing processes at the plant to produce battery cells in the most efficient way, thereby minimizing waste. The plant will also be able to adapt to the ongoing progressions in technology and materials, and will likely gain from strong economies of scale throughout the value chain.

Furthermore, the participation includes a joint-development agreement, which will bring the two leaders in battery science together with a target of reducing battery costs to industry-leading levels, and will also develop and produce state-of-the-art battery technologies.

This investment is an addition to General Motors’ manufacturing investments in Ohio, which totals $700 million approximately. It is expected to generate about 450 jobs in Toledo, Parma and Brookville. It is also aimed at positioning Northeast Ohio and the Mahoning Valley as a major hub for technology and electric-vehicle manufacturing.

In the past three months, General Motors has depreciated 10.2% compared with the industry’s 9.6% growth.

General Motors expects full-year capex to come in at $7.5 billion, lower than its prior projection. Amid impact of the UAW strike, the company has revised its full-year view. It now forecasts adjusted EPS between $4.50 and $4.80. The company expects adjusted automotive free cash flow within $1 billion.

Zacks Rank and Stocks to Consider

Currently, General Motors carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector are BRP Inc. DOOO, Spartan Motors, Inc. SPAR and SPX Corporation SPXC. While BRP and Spartan Motors flaunt a Zacks Rank #1 (Strong Buy), SPX carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has a projected earnings growth rate of 19.75% for the current year. Its shares have gained 69.2% over the past year.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 140.4% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The stock has appreciated 84.2% in the past year.

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