General Motors Company GM plans to sell its stake in a joint venture battery plant in Lansing, MI, to its partner, LG Energy Solution, as part of efforts to scale back its electric vehicle (EV) strategy. The sale, expected to close by the end of March, will allow GM to recover its $1-billion investment in the facility.

The deal does not affect GM's ownership stake in the Ultium Cells joint venture, which operates battery plants in Ohio and Tennessee. The Lansing plant, nearing completion, will serve a new, unidentified customer and currently employs nearly 100 people, meeting its employment commitments.

Per Paul Jacobson, chief financial officer of GM, the company is well-positioned with the appropriate cell technology and manufacturing capabilities to expand alongside the EV market while maintaining capital efficiency.

GM's decision comes amid growing uncertainty over EV battery production and consumer tax credits. Per Reuters, the president-elect Donald Trump's transition team may eliminate the $7,500 EV tax credit. Over the past year, GM has scaled back its EV ambitions, cutting its 2024 EV production forecast in June and revising plans to produce 1 million EVs in North America by 2025. In 2023, GM delayed production of electric pickup trucks at a Michigan plant by a year.

In a separate development, GM and LG Energy Solution are deepening their 14-year battery technology partnership to include prismatic cell development. GM also finalized a deal in August with South Korea's Samsung SDI to build a battery factory in Indiana focusing on prismatic cells, which could reduce EV costs and weight.

General Motors’ Zacks Rank & Other Key Picks

GM currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the auto space are Dorman Products, Inc. DORM, Tesla, Inc. TSLA and BYD Company Limited BYDDY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.66% and 51.98%, respectively. EPS estimates for 2024 and 2025 have improved by 75 cents and 88 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for TSLA’s 2024 sales suggests year-over-year growth of 2.97%. EPS estimates for 2024 and 2025 have improved by 2 cents each in the past 30 days.

The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 25.07% and 31.51%, respectively. EPS estimates for 2024 and 2025 have improved by 23 cents and 26 cents, respectively, in the past 30 days.