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Tariffs Raised on China-Made EVs: General Motors (GM) to Gain?
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At the conclusion of what is being dubbed a 2-year investigation into Chinese practices that have caused a strain on U.S. markets, the Biden administration has announced a string of tariffs on China-made goods traded in the United States. One of the focal sectors on which this decision is going to have an impact is electric vehicles (EV).
The government, on Tuesday, raised the border tax on China-made EVs from the existing 25% to a whopping 100% in response to the undercutting of prices by China and to protect U.S. jobs. It has also raised tariffs significantly on Chinese batteries, which would ramp up the prices of the Chinese EVs even further, as these automobiles are heavily dependent on them.
While the markets will be bracing for some sort of retaliation from China’s government, which has already vowed to do so, one segment that will be making merry is U.S. EV manufacturing. The big players in the segment will have a major competitive edge in pricing their products mainly because it is becoming abundantly clear that EVs are here to stay, and demand is rising by the day. Consumers are gradually shifting from cars run on fossil fuels to their environment-friendly alternatives.
National and global players that are likely to gett a boost from this major policy move by the incumbent administration include Tesla, Inc. (TSLA - Free Report) , Ford Motor Company (F - Free Report) and General Motors Company (GM - Free Report) .
While Tesla’s market share has been coming down over the past 12 months, it remained at a daunting 52% in first-quarter 2024. The second-placed Ford’s sales surged 86% year over year in the same quarter. Ford’s EV sales were overtaken by General Motors somewhat unexpectedly in 2023, before it staged a comeback.
The third-placed General Motors, however, has been having a stellar 2024. GM reported first-quarter 2024 adjusted earnings of $2.62 per share, which surpassed the Zacks Consensus Estimate of $2.08 and increased 18.5% year over year. Revenues of $43.01 billion beat the Zacks Consensus Estimate of $41.28 billion and increased from $39.9 billion recorded in the year-ago period.
GM’s expected earnings growth rate for the current year is 22.4%. The Zacks Consensus Estimate for its current-year earnings has improved 4.4% over the past 60 days. GM currently carries a Zacks #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GM’s share price, which has risen 4.9% over the past month, has been outdoing the Zacks Automotive – Domesticindustry, which has lost 2.6% in the same period. It is also recently featured in the list of Zacks’ list of most searched stocks. The time might be right to invest in the stock, which is also very competitively priced currently around the $45 mark.
Bottom Line
EV manufacturing in the United States will be a promising space to follow going forward with the government now on a self-proclaimed mission to boost EV manufacturing in the country. General Motors is a home-grown EV manufacturer that should be making the most of it.
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Tariffs Raised on China-Made EVs: General Motors (GM) to Gain?
At the conclusion of what is being dubbed a 2-year investigation into Chinese practices that have caused a strain on U.S. markets, the Biden administration has announced a string of tariffs on China-made goods traded in the United States. One of the focal sectors on which this decision is going to have an impact is electric vehicles (EV).
The government, on Tuesday, raised the border tax on China-made EVs from the existing 25% to a whopping 100% in response to the undercutting of prices by China and to protect U.S. jobs. It has also raised tariffs significantly on Chinese batteries, which would ramp up the prices of the Chinese EVs even further, as these automobiles are heavily dependent on them.
While the markets will be bracing for some sort of retaliation from China’s government, which has already vowed to do so, one segment that will be making merry is U.S. EV manufacturing. The big players in the segment will have a major competitive edge in pricing their products mainly because it is becoming abundantly clear that EVs are here to stay, and demand is rising by the day. Consumers are gradually shifting from cars run on fossil fuels to their environment-friendly alternatives.
National and global players that are likely to gett a boost from this major policy move by the incumbent administration include Tesla, Inc. (TSLA - Free Report) , Ford Motor Company (F - Free Report) and General Motors Company (GM - Free Report) .
While Tesla’s market share has been coming down over the past 12 months, it remained at a daunting 52% in first-quarter 2024. The second-placed Ford’s sales surged 86% year over year in the same quarter. Ford’s EV sales were overtaken by General Motors somewhat unexpectedly in 2023, before it staged a comeback.
The third-placed General Motors, however, has been having a stellar 2024. GM reported first-quarter 2024 adjusted earnings of $2.62 per share, which surpassed the Zacks Consensus Estimate of $2.08 and increased 18.5% year over year. Revenues of $43.01 billion beat the Zacks Consensus Estimate of $41.28 billion and increased from $39.9 billion recorded in the year-ago period.
GM’s expected earnings growth rate for the current year is 22.4%. The Zacks Consensus Estimate for its current-year earnings has improved 4.4% over the past 60 days. GM currently carries a Zacks #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GM’s share price, which has risen 4.9% over the past month, has been outdoing the Zacks Automotive – Domesticindustry, which has lost 2.6% in the same period. It is also recently featured in the list of Zacks’ list of most searched stocks. The time might be right to invest in the stock, which is also very competitively priced currently around the $45 mark.
Bottom Line
EV manufacturing in the United States will be a promising space to follow going forward with the government now on a self-proclaimed mission to boost EV manufacturing in the country. General Motors is a home-grown EV manufacturer that should be making the most of it.