Yahoo Finance Mazda (MZDAY) Pledges Nearly $11B to Ramp Up Electrification
Mazda Motor Corporation MZDAY recently announced an investment of $10.6 billion to electrify its lineup of vehicles by 2030. It forecasts EVs to account for 25-40% of its total sales by the beginning of the next decade. Stringent environmental regulations and changing customer preferences are creating a demand wave for battery-powered cars.
Its previous EV sales estimate was roughly 25% of sales by 2030.
Mazda, on a similar footing as many of the other top Japan-based players, has been on a slow pace in introducing EVs, as it continues to expect hybrid cars to aid emission reduction. The automaker was previously focused on improving ICE efficiency and bolstering the use of hybrid vehicles.
Mazda is following a multi-solution approach to boost its electromobility capabilities. Prior to the announcement, Mazda inked an agreement with battery maker Envision AESC to procure batteries for EVs produced in Japan.
As part of a three-phase plan, MZDAY would introduce battery-EV models in the second half of phase 2, which is sometime between 2025 and 2027. It intends to do a full-scale launch of all-electric vehicles between 2028 and 2030.
The investment will be made along with Mazda partners and utilized for research and development
The company has targeted about 4.5 trillion yen in net sales for the business year ending March 2026. This marks a significant jump of about 45% from the financial year ending March 2022.
Mazda’s collaboration with its main suppliers, such as Hiroshima Aluminum Industry, Imasen Electric, Ondo Corporation and HIROTEC Corporation, augurs well for the long-term growth of the company as well as the industry. Mazda’s efforts in procuring and securing batteries to expedite its electrification initiatives are noteworthy.
Shares of MZDAY have lost 14.7% in a year compared with the industry’s 38.9% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
MZDAY currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked players in the auto space – CarParts.com PRTS, sporting a Zacks Rank #1 (Strong Buy), and Allison Transmission Holdings ALSN and Genuine Parts Company GPC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
CarParts has an expected earnings growth rate of 85% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 72.7% upward over the past 30 days.
Allison has an expected earnings growth rate of 26.1% for the current year. The Zacks Consensus Estimate for ALSN’s current-year earnings has been revised 3.8% upward in the past 30 days.
Genuine Parts has an expected earnings growth rate of 18.1% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 0.2% downward over the past 30 days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Genuine Parts Company (GPC) : Free Stock Analysis Report
Allison Transmission Holdings, Inc. (ALSN) : Free Stock Analysis Report
CarParts.com, Inc. (PRTS) : Free Stock Analysis Report
Mazda Motor Corporation (MZDAY) : Free Stock Analysis Report
