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In a bid to boost the electric vehicle (EV) market, U. S. auto giant General Motors GM and South Korean battery supplier LG Chem have signed a monumental $19 billion deal. The agreement, which will span roughly the next decade, is expected to redefine the EV market. It is one of the largest contracts in GM’s history.
The agreement underscores LG Chem’s commitment to supply GM with more than 500,000 tons of critical cathode tissues between 2026 and 2035. These fabrics, in addition to nickel, cobalt, manganese, and aluminum, are critical parts for electric vehicle batteries, forcing cars with a diversity of more than three hundred miles. Notably, this source is expected to power around five million electric cars, underscoring GM’s ambitious EV production goals.
The cathode tissues will come from LG Chem’s plant, currently under construction in Tennessee. This strategic location aligns with GM’s joint venture mobile battery plants in North America, adding Ultium Cells LLC, an entity formed in collaboration with LG Energy Solution. Origin chain, the partnership aims to strengthen the production of electric vehicles in North America, developing the demand of the assembly market.
Jeff Morrison, GM’s vice president of global purchasing and supply chain, highlighted the importance of this contract in reinforcing GM’s commitment to building a physically powerful and sustainable electric vehicle supply chain. He highlighted the central role of the agreement in supporting GM’s growing desires to produce electric vehicles. In addition, Morrison emphasized the importance of locating production in Tennessee, strengthening the resilience of the North American origin chain.
LG Chem CEO Shin Hak-cheol echoed Morrison’s sentiments and highlighted the strategic cooperation between the two corporations to lead the North American electric vehicle market toward a sustainable future. He highlighted the common purpose of offering exclusive pricing to visitors through increased productivity and global expansion. production capabilities.
This groundbreaking agreement builds on the foundation established through the initial agreement between GM and LG Chem in 2022, in which LG Chem committed to supply GM with 968,000 tons of cathode active element through 2030. The expansion of the partnership underscores the GM’s long-standing commitment to electric cars. despite the industry downturn. Adoption rate higher than expected. This represents a strategic pivot for long-term planning, adapting to market conversion dynamics while reaffirming GM’s position as a leader in the electric vehicle revolution.
Furthermore, the agreement has broader implications for the electric vehicle market, signaling a paradigm shift towards sustainable transportation solutions. As governments around the world step up their efforts to address climate change, the electrification of shipping is emerging as a key strategy. The extensive investment in electric vehicle battery fabrics underlines its commitment to advancing this transformation, setting a precedent for other automotive giants to follow suit.
With a focus on sustainability, innovation and strategic collaboration, the partnership paves the way for accelerated expansion and technological advancements in the field of e-mobility. As GM and LG Chem pave the way to a greener automotive future, the repercussions of their collaboration are poised. to reshape the automotive landscape for years to come.
Zacks Ranking & Key Picks
General Motors has recently owned a Zacks Rank #3 (Hold).
Some prominent players in the automotive industry are Goodyear Tire GT, PACCAR PCAR, and Oshkosh Corporation OSK, which sport a No. 1 Zacks rank (strong buy). You can see the full list of today’s No. 1 Zacks rank stocks here.
Zacks’ consensus estimate for GT sales and earnings in 2024 suggests a year-over-year expansion of 2. 7% and 2,152. 6%, respectively. The EPS estimate for 2024 has increased 15 cents in the last 30 days. Goodyear has a score of A.
The Zacks consensus estimate for PCAR EPS for 2024 and 2025 has increased 51 cents and 34 cents, respectively, over the past 30 days. The company has beaten earnings estimates for the past four quarters, with an average gain of 17. 1%. it has a score of A.
Zacks’ consensus estimate for OSK sales and profits in 2024 suggests a year-over-year expansion of 6. 7% and 4%, respectively. The consensus estimate for 2024 EPS has risen 8 cents over the past seven days. Oshkosh has a Value score of A.
Disclaimer: This article was written with the help of Generative AI. However, it has reviewed, revised, supplemented, and rewritten portions of this content to ensure its originality and accuracy of the data incorporated.
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