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General Motors (GM) is to invest $1 billion to build electric cars in Mexico. The investment will go towards upgrading the company’s Ramos Arizpe Manufacturing Complex and plans are underway to inaugurate a new Painting Plant with the innovative technology.
Part of the $1 billion investment will also be utilized to expand the Assembly Plants and Global Propulsion Systems. Once operations start in June 2021, the Ramos Arizpe Complex will become GM's fifth electric car manufacturing site in North America.
General Motors has already begun construction on new facilities at the complex, where it plans to start producing electric cars from 2023. The automaker intends to start with the production of batteries and electrical components, beginning in the second half of 2021. (See General Motors stock analysis on TipRanks).
“We are very proud to contribute to the realization of GM's Vision of Zero Collisions, Zero Emissions, Zero Congestion, contributing to the manufacture of electric vehicles," said CEO Francisco Garza, GM, Mexico. “We trust that the necessary economic conditions will be met so that eventually the Complex can grow the workforce one more shift in some operations.”
Deutsche Bank analyst Emmanuel Rosner maintains a Buy rating on the stock. According to the analyst, General Motors is financially stable and boasts a solid outlook with large upside potential.
“GM’s strong 1Q performance and forward-looking outlook, in our view demonstrate the benefit from its proactive actions to transform the business, right size its costs and boost profitability," said Mr. Rosner.
The analyst has increased his price target to $67 from $65, implying 17.09% upside potential to current levels.
Consensus among analysts is a Strong Buy based on 11 Buys and 1 Hold ratings. The average analyst price target of $69.42 implies 21.32% upside potential to current levels.
GM scores a strong 9 out of 10 on TipRanks’ Smart Score rating system, implying it is likely to outperform market expectations.
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