General Motors partners with POSCO Chemical to manufacture battery materials

General Motors (GM) has partnered with POSCO Chemical to build a new plant in Bécancour, Quebec. The two have also partnered with the governments of Canada and Quebec to build the $400 million plant to produce cathode active material (CAM). GM shares fell 6.06% to close at $39.83 on March 7.

General Motors is an American company that designs, manufactures and sells cars, trucks and auto parts. General Motors’ next earnings report for the first quarter of 2022 is scheduled for April 26, 2022.

Installing CAM

Late last year, the two companies announced plans to form a joint venture with POSCO as the majority owner. Construction of the cathode processing facility is set to begin immediately and will create 200 jobs.

The active cathode material that will be produced at the facility is to be used in Ultium batteries that are expected to power General Motors’ electric vehicles (EVs). Additionally, there are plans to expand the facility in the future to meet growing needs as General Motors pursues electric vehicle supply chain projects.

The new facility is expected to allow General Motors to lead the region’s EV battery supply chain, as it also prepares to launch Canada’s first complete EV manufacturing plant in Ingersoll, Ontario. The company plans to have the capacity to produce 1 million electric vehicles in North America by the end of 2025.

Stock Valuation

Last month, Jefferies analyst Philippe Houchois reiterated a Hold rating on General Motors Stock with a price target of $53, implying upside potential of 33.07% from current levels.

The consensus among analysts is a moderate buy based on 10 buys and 5 holds. General Motors’ average price target of $74.27 implies upside potential of 86.47% from current levels.

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