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GM Raises 2022 Guidance, Sees North American EV Portfolio To Be Profitable In 2025

General Motors Co. (GM) raised 2022 guidance and expects North American EV portfolio to be profitable in 2025. GM's EV subsidiary, BrightDrop, forecasts $1 billion in revenue for 2023. Vale and GM signed long-term nickel supply agreement in Canada critical to North American EV supply chain.

In the next three years, GM plans to move very aggressively toward EV leadership as EV adoption is expected to approach 20% of U.S. industry sales in 2025, the company told investors at a meeting in New York City.

Five GM assembly plants in the U.S., Canada and Mexico will be building Evs.

During the meeting with investors, Paul Jacobson, GM executive vice president and chief financial officer, said that GM now projects full-year 2022 adjusted automotive free cash flow will increase to $10 billion- $11 billion from its previous guidance of $7 billion- $9 billion.

GM now projects 2022 EBIT-adjusted for the full year will be in a range of $13.5 billion - $14.5 billion, compared to its previous guidance of $13 billion - $15 billion.

Total company revenue is expected to grow at a 12% compound annual rate through 2025, reaching more than $225 billion as EV volumes and software revenue grow. Revenue from EVs is expected to be more than $50 billion in 2025.

GM expects to build 400,000 EVs in North America from 2022 through the first half of 2024 and grow capacity to 1 million units annually in North America in 2025.

GM expects to reach U.S. battery cell capacity of more than 160 GWh and 1.2 million cells per day by mid-decade.

Total capital spending is expected to be $11 billion - $13 billion per year through 2025, funded by ongoing healthy cash flows.

GM expects to maintain its historical EBIT-adjusted margins of 8-10% in North America through this growth investment period.

GM expects to earn low- to mid-single-digit EBIT-adjusted margins on its EV portfolio in 2025, before the positive impact of clean energy tax credits.

Meanwhile, BrightDrop shared with investors that it is on track to reach $1 billion in revenue in 2023. It also confirmed that it is set to generate up to $10 billion in revenue and reach 20% profit margins by the end of the decade.

In a Separate press release, Vale Canada Limited, a subsidiary of Vale S.A., and General Motors, said that they have signed a term sheet for the long-term supply of battery grade nickel sulfate from Vale's proposed plant at Bécancour, Québec, Canada.

As per terms of the agreement, Vale will supply battery grade nickel sulfate, equivalent to 25,000 metric tons per year of contained nickel, for use in GM's Ultium battery cathodes, which will power a broad portfolio of electric vehicles including the Chevrolet Silverado EV, Blazer EV and Equinox EV, the Cadillac LYRIQ, the GMC Sierra EV, and the GMC HUMMER EV Pickup and SUV.

The amount of contained nickel is sufficient to supply approximately 350,000 EVs annually. Deliveries are targeted to commence in the second half of 2026.

Vale and GM have also agreed to study collaborative ways to partner on advanced technology development and commercialization pathways to harvest recycled metals.

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