General Motors Shifts Gears: Strikes $19B Pact with LG Chem For Fueling EV Dream
Portfolio Pulse from Lekha Gupta
General Motors Co (NYSE:GM) has entered into a $19 billion supply contract with LG Chem for cathode materials, essential for EV batteries. This deal, spanning from 2026 to 2035, will support the production of 5 million high-performance EVs. The partnership emphasizes strengthening the North American supply chain, particularly through LG Chem's cathode plant in Tennessee. Additionally, GM reported a slight sales decline in Q4 FY23 but beat analyst estimates, with a positive outlook for FY24.
February 07, 2024 | 3:46 pm
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POSITIVE IMPACT
General Motors' $19 billion deal with LG Chem for EV cathode materials signifies a major step towards its EV production goals, with a positive impact expected on its stock due to the strengthened supply chain and positive FY24 outlook.
The deal with LG Chem is a strategic move for GM, ensuring a stable supply of critical materials for EV production. This, combined with a better-than-expected Q4 FY23 performance and an optimistic FY24 outlook, suggests a positive short-term impact on GM's stock. The emphasis on strengthening the North American supply chain and the focus on sustainable EV production are likely to be viewed positively by investors.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100