TLDR
- GM stock dropped 3.8% to $80.60 despite announcing a range of new battery energy initiatives
- GM is partnering with Peak Energy to develop sodium-ion battery cells for grid-scale storage
- Bidirectional charging and a new EV charging app were also announced
- UBS maintained its Buy rating and $102 price target on GM following the announcements
- Inflation hitting 4.2% in May may have weighed on the broader market reaction
General Motors stock fell nearly 4% on Tuesday after the company unveiled a series of battery energy announcements that failed to spark the kind of enthusiasm Ford got when it launched its energy business last month.
GM stock was trading at $80.60 in midday trading, down 3.8%, while the S&P 500 was down just 0.1%. The drop came on a day when GM was trying to make news for the right reasons.
The announcements included bidirectional charging, which lets an EV power a home or sell electricity back to the grid. GM also launched a new EV charging app and said battery recycler Redwood Materials will use retired EV batteries to power one of its sites.
The headline move, though, is GM’s strategic partnership with Peak Energy, a startup focused on grid storage. The two companies will work together to develop sodium-ion battery cells for grid-scale energy storage applications. GM Ventures made a strategic investment in Peak Energy, and GM retains exclusive manufacturing rights for the cells developed in its Michigan battery labs.
Why Sodium-Ion?
Sodium-ion batteries cost less to produce than lithium-ion. They hold less energy per unit of volume, but that’s not a major issue for stationary storage applications like utility grids or data centers.
“When you’re talking to a utility, a hyperscaler, or other power providers in need of energy storage solutions, their priority is not maximizing range or minimizing weight,” said Kurt Kelty, GM’s vice president of battery and sustainability. “It is delivering reliable, affordable power over long periods of time.”
UBS analyst Joseph Spak kept his Buy rating and $102 price target on GM after the announcement. He noted the sodium-ion technology is still early-stage, with only a test lab and no manufacturing facility in place yet. GM has not disclosed the investment amount or provided timelines on gigawatts to be deployed.
UBS added that GM Ventures typically doesn’t make large investments, and the firm believes the Peak Energy stake is not material to GM’s financials. The company said the venture fits within its previously communicated spending plans.
Ford Set a High Bar
GM investors may have been hoping for a Ford-style reaction. Ford stock jumped from around $12 to $17 in May after launching Ford Energy, its utility-scale battery storage business. Wall Street estimated Ford Energy could add roughly $500 million in operating profit by the end of the decade.
Ford stock was also down on Tuesday, off 2.9% to $14.50, suggesting some of that earlier excitement has cooled.
The broader market wasn’t helping GM either. U.S. inflation came in at 4.2% in May, the highest in years, which appeared to weigh on sentiment across the market.
GM stock is still up 73% over the past year and currently trades above its Fair Value according to InvestingPro data. UBS has a $102 price target on the stock.
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