The Zacks Analyst Blog Highlights Honda, Stellantis, Allison Transmission, Ford and General Motors
For Immediate Release
Chicago, IL – October 18, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Honda HMC, Stellantis STLA, Allison Transmission ALSN, Ford (F) and General Motors GM.
Here are highlights from Monday’s Analyst Blog:
Auto Stock Roundup: Slew of Updates from GM, Stellantis and More
Last week, China Association of Automobile Manufacturers (CAAM) released vehicle sales data for September. Total car sales totaled 2.61 million units, up 25.7% year over year. Passenger car sales were up 32.7% to 2.33 million units, while commercial vehicles were down 12.5% to 2,790,000 units. Last month, sales of new energy vehicles (NEVs) totaled 708,000 units, jumping 94% year over year. Sales of NEVs totaled 4.56 million units during January-September 2022, rocketing 111.5% from the corresponding period of 2021.
On the news front, Italian-American carmaker Stellantis made a series of announcements as it is gearing for a rapid transformation to an ambitious technology-defined sustainable mobility for the future. Japan’s auto magnate Honda selected Fayette County, OH, to build its multibillion-dollar plant in a JV with LG Energy to make batteries for EVs. Auto equipment provider Allison Transmission unveiled eGen Force, its first electric hybrid propulsion system, for combat vehicles.
U.S. auto giant Ford released its third-quarter China vehicle sales data. Close peer General Motors also made it to the top stories with a couple of updates. GM released its third-quarter sales data in China. The auto giant delivered roughly 630,000 vehicles in the country in the September-end quarter. Meanwhile, it launched a business unit, GM Energy, to provide a holistic home energy management system. Also, to secure nickel for green vehicles, it announced a collaboration with Queensland Pacific Metals.
Last Week’s Top Stories
General Motors unveiled Ultium Home and Ultium Commercial, which, together with the existing Ultium Charge 360, will create energy management products and services. The framework will be housed under a new business unit called GM Energy. GM Energy's product and service offerings will provide energy management for home, commercial and EV customers through various solutions.
General Motors recently secured a new source of cost-competitive nickel and cobalt for Ultium battery cells with a strategic investment in Queensland Pacific Metals of Australia. Per the agreement, GM is expected to invest up to $69 million in Queensland Pacific Metals to develop its proposed Townsville Energy Chemicals Hub Project in Northern Australia. The collaboration with Queensland Pacific Metals will provide GM with a secure, cost-competitive and long-term supply of nickel and cobalt from a free-trade agreement partner and will aid its EV production requirements.
Honda announced that it has chosen Fayette County, OH, to build its multibillion-dollar plant in a joint venture with LG Energy to make batteries for EVs. Honda had inked a deal with LG Energy to invest $4.4 billion in a U.S. battery plant in late August. At that time, the companies hadn’t revealed the location of the plant. Honda currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Construction of the new facility is expected to commence in early 2023. The mass production of lithium-ion batteries will begin by the end of 2025. The facility is expected to provide jobs to around 2,200 people. Additionally, Honda also announced its plans to spend $700 million to retool some of its existing plants to boost the production of EVs. The company is set to start production and sales of EVs in North America in 2026.
Stellantis signed a non-binding MoU with GME Resources Limited for the procurement of battery-grade nickel and cobalt sulfate products in the future from the NiWest Nickel-Cobalt Project in Western Australia. The raw material procurement chain will strengthen Stellantis’ EV electric vehicle battery production and bring it closer to its de-carbonization target.
In other news, STLA inaugurated a software center in Bengaluru, India, to develop advanced software and technological innovations. The center underlines the auto maker’s vision of ushering in a futuristic digital strategy for a populous and high-demand-centric market like India.
In yet another noteworthy development, Stellantis announced an extensive plan for its Circular Economy Business Unit to rake in more than €2 billion in revenues by 2030 and inch toward the carbon neutrality target by 2038. The Circular Economy Business Unit is one of the firm’s seven incremental business units. It stands on the 4R strategy, namely reman or remanufacture, repair, reuse and recycle to ensure a sustainable future for the company.
Allison introduced the eGen Force, a company-first electric hybrid propulsion system for tracked combat vehicles. The eGen Force caters to the needs of the U.S. Army’s Optionally Manned Fighting Vehicle (OMFV) program as the system is designed for 50-ton tracked vehicles. It can also be extended to 70-ton tracked vehicles, thereby enabling it to meet requirements for future Main Battle Tank models.
Allison said that the eGen Force has begun dyno and engine stand testing that will be followed by vehicle testing in early 2023. The company is partnering with American Rheinmetall Vehicles, LLC, (“ARV”) to integrate eGen Force into the latter’s OMFV offering. The ARV vehicle delivers premium mobility and power solutions in a modern chassis that greatly benefits soldiers and squads in their mission.After a steady success in the eGen Power portfolio, the latest launch of its first electric hybrid propulsion system further contributes to its innovative product launches.
Ford sold more than 133,000 vehicles in China, implying a decline of 11% year over year. But volumes grew 12% from the second quarter of 2022, thanks to the easing of COVID-related restrictions. Sales of both the namesake and the Lincoln brands witnessed a sequential increase. Lincoln recorded its best-ever third-quarter sales, which exceeded 23,800 units, up 31% from second-quarter 2022.
Passenger vehicle sales of the Ford brand rose 23% sequentially to 54,400 units. Thanks to the robust demand for SUVs, Ford brand SUV sales were up 3% and 27% on a yearly and a sequential basis, respectively. Ford’s SUV portfolio expanded with the launch of the new Ford Explorer. Customer orders for the model were more than 5,000 within two days of its launch on Sep 6. Ford brand EV sales exceeded 1,400 units in the quarter under review in China. Notably, during the third quarter of 2022, the company launched Ford Model e Technology to bolster the EV business in China.
What's Next in the Auto Space?
Investors will keenly await the quarterly results of Tesla, Winnebago, Lithia, Genuine Parts and Autoliv, which are likely to release this week. Industry watchers will keep a tab on September passenger vehicle registrations to be released by the European Automobile Manufacturers' Association.
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