GM Stock Suffers Despite Battery Plant Stake Sale Plan: Retail Sentiment Dips To 5-Month Low
By Stocktwits Inc | First Published Dec 4, 2024, 12:21 AM ISTThe company anticipates recovering approximately $1 billion from the sale, according to sources cited by CNBC.
Shares of General Motors Co. fell over 1.5% on Tuesday, on course for their second consecutive session of losses.
The company said it plans to sell its $2.6 billion stake in the nearly completed Ultium Cells LLC battery cell plant in Lansing, Michigan.
Latest Videos
GM reached a non-binding agreement with joint venture partner LG Energy Solution to offload its stake, with the deal expected to close in the first quarter of 2025, pending customary approvals.
The company anticipates recovering approximately $1 billion from the sale, according to sources cited by CNBC.
Despite this divestment, GM reiterated it remains committed to leveraging the Ultium Cells plants in Ohio and Tennessee to meet the growing demand for electric vehicles (EVs).
"Our EV profitability is rapidly improving thanks in part to our strategic decision to build battery cells in the U.S. with LG Energy Solution. It will be years before some of our competitors approach this level of performance,” said CFO Paul Jacobson.
However, retail sentiment on Stocktwits turned ‘extremely bearish’ (24/100) Tuesday afternoon, hitting its lowest score in five months, reflecting doubts about GM’s strategic outlook amid broader uncertainty about federal incentives for EVs under President-elect Donald Trump.
Trump’s plan to impose a 25% tariff on imports from Canada and Mexico, key suppliers for GM, has further clouded the outlook.
Additionally, the National Highway Traffic Safety Administration’s announcement on Tuesday of a recall affecting 132,037 GM trucks over tailgate issues appears to have added to the stock’s bearish momentum.
GM’s EV sales have climbed, securing the company the second spot in the U.S. EV sales for the third quarter (Q3) with 32,000 units sold.
Yet, EV penetration of new car sales in the U.S. has lagged behind earlier industry forecasts, tempering optimism.
GM stock, up about 50% year-to-date, is now contending with investor skepticism as it navigates a mix of opportunities and challenges in the evolving automotive landscape.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
subscribe to Asianet Newsable WhatsApp channel by clicking here. For more reliable and latest news
subscribe to Asianet Newsable Telegram channel by clicking here.