GM Stock Could Rise If EV Spinoff Materializes, Analysts Predict
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As General Motors’ battery-driven future continues to crystallize, analysts are speculating that the automaker could see a significant boost to stock prices following a spin-off for its electric vehicle business. One analyst even predicts that GM stock could triple in the wake of a GM EV spinoff brand.
Per a new report from Fortune, Deutsche Bank analyst Emmanuel Rosner said that Wall Street’s enthusiasm for EV companies like Tesla could help to drive GM stock to $93 if the automaker offers a stake in its EV business on the stock market. Rosner added that GM was most likely “actively evaluating the option,” and that a spinoff “would force the market to recognize [GM’s] robust EV technology and upcoming vehicle lineup and unlock considerable shareholder value.”
Morgan Stanley analyst Adam Jonas also weighed in on the issue, saying that the GM EV business, plus a stake in its battery joint venture with LG, could result in a rise for the company’s stock. Jonas subsequently raised his price target for GM stock to $46.
“It’s about time Tesla had more competition, right?” Jonas wrote in a report on Tuesday.
The new GM BEV3 electric-vehicle platform
GM stock prices were at $29.88 Tuesday afternoon. Shares have gained upwards of 21 percent this month, with an 18-percent loss for the year, and gains of less than five percent over the last five years.
Back in October of 2019, GM Authority proposed that GM launch a new standalone brand for its electric vehicles, something which would offer a sleek, futuristic, and tech-saavy marketing strategy, as well as a separate dealership network.
Then in July, during a call with analysts following the release of the GM Q2 2020 earnings numbers, GM CEO Mary Barra was asked if General Motors would consider an EV spinoff brand.
“We are open to looking at and evaluate anything that we think is going to drive long-term shareholder value, so I would say nothing is off the table,” Barra responded, adding that she saw no obstacles to making it a reality.
Cadillac Lyriq show car
General Motors currently offers the Chevrolet Bolt EV as it’s sole all-electric vehicle offering, but has several other EV products just over the horizon. For example, GM recently debuted the Cadillac Lyriq show car, which previews the upcoming Lyriq EV crossover slated for production late in 2022. General Motors is also revamping the Hummer brand as a new all-electric pickup truck and SUV.
Both the Lyriq and the Hummer EV will come with GM’s Ultium battery technology, which was developed in a new joint venture with South Korean supplier LG Chem. The joint venture is called Ultium Cells LLC.
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The future is arriving. I’m glad GM is demonstrating vision and grabbing a piece of the pie!
Deutsche Bank would love it, it would be a gift to the German and Japanese auto companies. It would divide GM in two which would be much easier take over targets for foreign car companies. Also how do you breakup the brand names and dealership networks? The existing dealers would bring huge lawsuits if you take away the future of electric vehicles from them. The double corporate overhead, lawsuits, creating new brands and dealership networks, and traumatizing the corporation would come at a tremendous cost. Who would make out?; the competition (especially foreign), the investment bankers, the lawyers, and unscrupulous executives who would rather get huge golden parachutes then run GM for the long run. You don’t see DB making this recommendation for VW, Daimler-Benz, BMW, do you? DB would like to see GM divided and purchased by a German automaker.
Not to mention that the “legacy” GM will probably end up offering electric vehicles of their own.
The historic brands might be left for dead or forced to license the EV technology that their sales helped create. This new GM would be spun off like Delco. It might as well include Cruise.
EV GM it seems would create a new brand? We’ve seen that with Saturn. It would fail. The two GM companies would indeed be takeover targ err ts but likely end up reuniting once this project failed.
GM stock will rise based on it’s offerings and reliability, along with ability to be a well managed company. IF they spin off the stock considering they eventually plan to scrap ICE it would make their main stock worthless and again hose the investors.
To reiterate the comment above, what happens when GM has separate dealers for ice and ev. The ice dealers are expected to slowly fold as ev takes over. I would think they slowly convert what they already have.
We’re under 100 days from the next Presidential election and the result could throw this idea into the trash because if Joe Biden is elected and he goes through with a $4-6 Trillion tax bill, all the potential jobs from building EV will go to China along with tens of thousands of other jobs because Biden promises to roll back all of the regulations which makes doing business in this country unaffordable.
don’t forget to remind everyone the lyriq will cost $200K under the biden administration.
You are so full of it! We definitely don’t need four more years like the last four! The main reason GM is still here is because of the Democrats.
I simply cant believe the analysts think this !
It is clear here they think they know money yet can’t figure out why the GM stock isn’t moving higher on the EV news.
ITS BECAUSE THERE IS NO EV NEWS HERE ! GM is just talking again !!
When GM starts delivering ANYTHING NEW, the stock price will start moving, even I might buy some and that’s saying something !
However GM is just HORRIBLE at the customer relationship, and I mean even the stock customer !!
GM has been going on, and on, and on, and on, and on, and on, about the next products will be great.
————————- AND THEY HAVE NOT ————————–
Remember the Cadillac onslaught ? All the NEW Cadillacs we were going to get in 6 months, man they were going to be great !
They are NOT great, they are NOT even comparable to the current competition, and most will be redone soon !
Cheap ” Good Enough ” interior, GM BLAH platform’s etc.
The trucks are the SAME thing.
————————— NOT GREAT ————————
GM is setting 8 to 12 thousand on the hoods to get them to sell with the competition, when they were priced what GM wanted to sell them for, they sat and did NOT move !
And the horrible interior for the high end trucks !
And now the transmission troubles of both the 8 and 10 speeds !
And NO warranty !
And NO parts to fix them !
And HORRIBLE, just HORRIBLE customer support !
Class action lawsuit, after class action lawsuit, after class action lawsuit,
—————— JUST BECAUSE GM WILL NOT COMMUNICATE WITH THE CUSTOMER —————————-
If GM splits the ICE and EV they BOTH will be worth nothing !
The only thing holding it where it is today is the slim and I mean slim, did I say SLIM, chance that GM can even release a price comparable EV when put up against the competition.
In 2 or 3 or 4 or 5 years.
And GM still wants us to believe they are doing something different than NOW !
Or will they have to redesign the interior like the truck interior ?
Or will EV’s operate like the 8 and 10 speed transmissions ?
Tricks are simply getting OLD at GM !
Spin this off-
Make a SUV Corvette –
Make an EV –
The Cadillac NAME will save us –
The Hummer NAME will save us –
GM
—————– DELIVER SOMETHING ————————
Pontiac……
If GM wants to spin off anything it should be Cruise. Time to get value out of it before the alleged enthusiasm over self-driving cars fizzles out even further.
It’s a stupid move! Only counts the perseverance in the improvement of the batteries’ technology, the range, time of recharge, the charging network. Tesla shows their commitment towards the electric car by regular, constant evolutions. In addition, Tesla becomes an energy supplier, not just a carmaker, they offer a microcosme with its charging network, home energy storage, solar panels and that’s what the customers like. It’s the customers’ enthousiasm and the popularity of Tesla that attracts Wall Street, nothing else. Even, the GM’s ICE business could be worth something if, in the future, the artificial photosynthesis is developed to produce fuel.
The way to do this is to put all the new exciting products in the new company, milk the old one to death and then declare bankruptcy to wipe out all the legacy costs including pensions, benefits and obligations. With a fresh start, the new firm would be a formidable Tesla competitor.
That’s how you make money boys!
The best thing GM could do it to spin off Mary Barry. That the first legacy cost they should get rid of.
Long-term value iui s being overlooked in favor of short term gain. The historic brands might be left for dead or forced to license the EV technology that their sales helped create. This new GM would be spun off like Delco. It might as well include Cruise.
EV GM it seems would create a new brand? We’ve seen that with Saturn. It would fail. The two GM companies would indeed be takeover targ err ts but likely end up reuniting once this project failed.
Maybe the Chinese would buy it just like Delco
Just a plain stupid idea. Short term gains maybe longterm not so great.