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General Motors (NYSE:GM) rattled the automobile sector by announcing that it made a strategic investment in startup Lithion Recycling’s financing round.
The deal was struck through its GM Ventures investment arm for an undisclosed amount.
The EV recycling move struck by the Detroit auto giant will give it validation of Lithion’s recovered battery materials for the production of new batteries and will allow it to participate in R&D for the further advancement in recycling/battery technology.
For its part, Lithion will launch its first commercial recycling operations in 2023. The opening of this facility, with a capacity of 7,500 metric tons per year of lithium-ion batteries, will be followed in 2025 by the launch of Lithion’s first hydrometallurgical plant.
Wedbush Securities viewed the move favorably, with analyst Dan Ives calling it another step in the right direction as the company looks to keep battery costs low, increase operating leverage, vertically integrate, and expand the company’s adaptability.
“With heavy investment from GM of $7 billion on this EV buildout, the company also stands to benefit off of the IRA tax credits released with this move as the company positions itself and expands its North American sourcing and production base,” he noted.
Wedbush has an Outperform rating on General Motors (GM) and price target of $42.
Read the latest breakdowns on GM from Seeking Alpha contributors.
