Legacy automaker General Motors (GM) has been hard at work building out its own electric lineup. While it has not had near the trouble that Ford (F) has had in that vein, it is still running into some issues as well. However, new reports suggest its Cadillac line will be electric in a big way, by the end of this year. Shareholders were oddly displeased, and sent shares ticking down fractionally in Tuesday afternoon’s trading.
Cadillac, GM’s luxury brand, looks for a lot of buyers to go electric this year. In fact, it looks for between 30% and 35% of its United States sales to come from electric cars. This is a significant departure from the rest of the industry, as wide-spread sales of electric vehicles have certainly not caught on. This was absolutely not the case at Ford, where electric vehicle sales are a meager percentage of total sales.
But with the Cadillac line offering five different electric models by the end of this year, from the comparatively basic—for a Cadillac—Optiq to the full-on Escalade IQ, there may be a potential explanation for those sales. Cadillac buyers seem particularly interested in electric models. Moreover, GM looks to sell these models not to replace their internal combustion models, but rather to supplement them, offering a growth vector for GM as a whole.
A Page out of Ford
Meanwhile, GM likely also took notice when Ford offered up its home charging plans, because GM seems interested in doing something similar. GM is looking to offer up home charging capabilities as well, and focusing on Californian drivers to start with.
GM is running a “virtual power plant” project in California, in which GM customers get $4,500 off GM Energy “bidirectional home charging equipment” if they join up with a PG&E project. Basically, the project calls for electric GM vehicles to serve as supplementary power grids, supplying power back to the grid during peak hours, and recovering that power when rates are lower, during off-peak hours.
Is GM a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GM stock based on 10 Buys, three Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 18.39% rally in its share price over the past year, the average GM price target of $64.64 per share implies 32.7% upside potential.
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