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Dana (DAN) & Hydro-Quebec Set to Form JV Partnership for EVs

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Dana Incorporated DAN announced a joint venture (JV) partnership with Canada's largest electricity producer, Hydro-Quebec. Per the announcement, Hydro-Québec’s subsidiary TM4 Inc. will supply electric motors, power inverters and control systems to Dana. Additionally, Dana will hold the majority share of TM4 against a payment of CA$165 million (US$127 million) and Hydro-Québec will keep 45% stake.

Established in 1998 by Hydro-Québec, TM4 designs and manufactures electric motors, generators, power electronics and control systems for electric vehicles (EVs), making it suitable for Dana’s range of electric gearboxes and thermal-management technologies for batteries, motors, and inverters. The collaboration will position Dana as the sole provider of complete gearboxes, motor, inverter and thermal-management capability for electrified vehicles.

Per management, the JV will help the company to gain a leading position in mechanical power conveyance and thermal-management technology. TM4’s skilled production of electric motors and its distribution will cater Dana’s customers at the end markets.

Dana Incorporated Price and Consensus

Dana Incorporated Price and Consensus | Dana Incorporated Quote

Moreover, TM4 has a 50:50 JV with China’s Prestolite Electric Beijing Limited that offers electric mobility solutions throughout China and the ASEAN region (consisting of Southeast Asian nations). This will further strengthen Dana’s footprint in China and its neighboring countries. The company already has a presence in the leading market for EVs through its local, wholly-owned and joint venture companies.

A leading provider of highly engineered solutions, Dana caters to passenger vehicles, commercial trucks and off-highway markets. It also offers industrial and stationary equipment applications.

Price Performance

Over a month, Dana’s stock has moved down 6.1%, underperforming 1.2% increase of the industry it belongs to.

 

Zacks Rank & Stocks to Consider

Currently, Dana has a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Allison Transmission Holdings, Inc. ALSN, Oshkosh Corporation OSK and Toyota Motor Corporation TM. Allison Transmission and Oshkosh sport a Zacks Rank #1 (Strong Buy), while Toyota carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have risen 11% over the past year.

Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 5.6% over the past year.

Toyota has an expected long-term growth rate of 5.7%. Shares of the company have risen 30% over the past year.

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