Last week, Wedbush analyst Dan Ives revealed his upcoming analysis of GM (GM) after a factory visit, claiming that the automaker had the most “underrated” in the industry. Today we have his full report — in keeping with his bullish theme.
“During the tour at GM HQ, we were able to see the company’s battery and innovation facility along with its vehicle design studios, two key areas where GM is betting on the company’s future in the coming years. next decade,” Ives wrote in an investor note. “After that day, it became clear to us that GM was at a tipping point in innovation, leading the overall transition to EVs with vehicle quality, goal-driven employee base, and profitability/flow. money is taken care of.”
Ives’ visit to GM and its subsequent analysis of the trip follows last month’s GM investor day event in New York City, where the company updated its EV game plan.
At the time, the automaker said its electric vehicle portfolio would be “solidly profitable in 2025” in North America, as the company expands electric vehicle capacity to more than 1 million units annually. This milestone is years ahead of schedule, when it was initially expected that profit margins for electric vehicles would be comparable to those of gasoline-powered cars by 2030.
The first big factor in why Ives is optimistic about GM is that he believes that Street doesn’t realize the full value of GM’s proprietary battery technology, the Ultium platform.
“With the ability to use the same battery platform for almost any different chassis, multiple vehicles can now be built on the exact same platform, greatly reducing the company’s traditionally large R&D costs. that an automaker would see in an ICE or retrofit vehicle, he said.
Ives said the next generation of Ultium batteries will help reduce costs for GM, while also being an innovation engine. Ives calls Ultium GM “the secret sauce”.
The second component of the GM EV story for Ives is a strong development in design and engineering. While GM was slower than rival Ford (F) on the fact that there are many electric vehicles on the market, Ives believes the patience will pay off for the automaker as GM has spent that time improving the Ultium platform in order to launch several electric vehicles at the same time, instead of parts.
Ives said the “highlight” of the trip was seeing GM turn designer sketches into the final product, with the Ultium platform giving the company a cost-effective approach. to produce and bring “advanced” vehicles to market.
“With GM set to release several new electric vehicle models over the next 12 to 18 months, this shift to an electric future is key to GM’s growth story as the company continues to invest in the platform. its Ultium platform while expanding its offering across the board, Ives said.
Wedbush maintains an “outperform” rating on GM after the visit and a $46 price target.