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General Motors to Hike EV Bolt Production to Meet Demand


General Motors Company GM announced that it would increase the production of Chevrolet Bolt electric vehicle (EV) to meet growing demand, per Reuters. Additionally, the carmaker asked the U.S. Congress to rethink about the expansion of the tax credit for EV.

Per management, the U.S. regulators should consider the potential benefits of increased usage of autonomous vehicles while deciding on tax credits. Few of the benefits associated with these vehicles are, lower carbon dioxide emission and fuel consumption, among others.

At present, once an automaker achieves a sales target of 200,000 EV units in a year, it no longer remains eligible for a consumer tax credit of up to $7,500 per vehicle. General Motors already sold 160,000 units of full-electric and plug-in vehicles and are anticipated to strike the limit by the end of this year.

General Motors Company Price and Consensus

Per the December 2017 tax bill, the government did not remove tax credit on EVs and also did not act on the proposal to raise the limit.

Launched in October 2016, General Motor’s Chevrolet Bolt was the first EV, available at a price under $40,000, to run over 200 miles on a single charge. In 2017, General Motors sold total 26,000 units of Bolt, though electric-driven vehicles account a fraction of its overall sales figure.

Later in 2018, the company will increase the production of Bolt at its Orion plant near Detroit, MI, which is also expected to generate new job opportunities.

Price Performance

In the last six months, shares of General Motors outperformed the industry it belongs to. During the period, the company’s stock gained 1.3% as against the industry’s decline of 3.9%.

Zacks Rank & Other Key Picks

General Motors sports a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks in the auto space are Peugeot SA PUGOY, Toyota Motor Corporation TM and Volkswagen AG VLKAY, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Peugeot has an expected long-term growth rate of 16.6%. In the last six months, shares of the company gained 9.7%.

Toyota has an expected long-term growth rate of 6.1%. Shares of the company gained 11.5% in the last six months.

Volkswagen has an expected long-term growth rate of 18.7%. In the last six months, shares of the company gained 20%.

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