Yahoo Finance General Motors (GM) & LG to Create $150M Fund for Bolt Owners
General Motors Company GM and LG Energy Solution have agreed to establish a $150 million relief fund for Chevrolet Bolt EV owners affected by faulty batteries.
GM used LG-manufactured batteries in its Chevrolet Bolt EVs. Following a few fire complaints in some vehicles, the automaker recalled around 141,000 vehicles between late 2020 and 2021.
The settlement, which awaits judge approval, creates a fund to compensate Bolt EV owners. Per documents filed with Michigan Eastern District Court, the owners of the recalled Bolt EVs who received a battery replacement or installed the software fix are eligible for $1,400 while those who sold or leased their vehicle before the settlement date will get a minimum of $700. Around 102,560 Bolt EV owners will receive the compensation.
In 2023, GM halted production of the Bolt EV to make way for the new EVs. In 2021, the automaker announced a billion-dollar recall campaign for thousands of Bolt EVs, which resulted in a production and sales halt of Bolt for more than six months.
GM's Chevy Bolt battery issues and low EV sales have hurt its market share, which fell to 2.8% in the first quarter from 3.4% in the previous year.
Despite setbacks from battery issues, General Motors remains committed to its EV strategy and plans to phase out gas-powered cars by 2035.
The automaker aims to double its EV production capacity and reach profitability by mid-2024, despite last year's demand slowdown. The company reported a 36% sequential increase in US Ultium EV battery deliveries in the first quarter.
Per Paul Jacobsen, CFO of GM, ramped-up production at the automaker's Ohio and Tennessee plants has reduced Cadillac Lyriq EV production costs by $12,000. The Tennessee plant will reach full capacity by year-end.
This increased production keeps General Motors on track to achieve its production and wholesale volume target of 200-300 thousand units in 2024, which is down from its earlier goal of 400 thousand units. The company is aiming for EV profitability in the second half of the year.
Zacks Rank & Key Picks
GM currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Geely Automobile Holdings Limited GELYY, Blue Bird Corporation BLBD and Oshkosh Corporation OSK, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELYY’s 2024 sales suggests year-over-year growth of 36.6%. The earnings per share (EPS) estimates for 2024 and 2025 have moved up 34 cents and 54 cents, respectively, in the past 60 days.
The consensus estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.29% and 155.14%, respectively. The EPS estimates for 2024 and 2025 have improved 63 cents and 69 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 9.86% and 10.72%, respectively. The EPS estimates for 2024 and 2025 have improved 72 cents and 67 cents, respectively, in the past 30 days.
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General Motors Company (GM) : Free Stock Analysis Report
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Geely Automobile Holdings Ltd. (GELYY) : Free Stock Analysis Report
Blue Bird Corporation (BLBD) : Free Stock Analysis Report
