Only a year ago, automakers General Motors (NYSE:GM) and Honda Motor (NYSE:HMC) joined forces in a $5 billion effort to jointly develop affordable EVs. Now, the two companies are walking away from this plan, which was envisaged to dislodge EV pioneer Tesla (NASDAQ:TSLA) from its throne, as reported by Reuters.
This development comes as General Motors moves to slow down the introduction of EV models amid a focus on profitability. While GM delivered a third-quarter beat this week, the company has pulled its full-year earnings guidance due to the impact of the United Auto Workers (UAW) strike. Production stoppage from the strike has cost GM nearly $800 million in pre-tax earnings, including $200 million in Q3.
Although the two companies are mutually parting ways, Honda still intends to go all-electric by 2040, and GM plans to take its annual EV capacity to about a million units in North America by the end of 2025.
Nevertheless, the partnership between Honda, GM, and its robotaxi unit, Cruise, remains intact. Earlier this week, Cruise was asked to take its driverless cars off state roads in California. The U.S. state has suspended Cruise’s driverless testing permit due to safety concerns and potential risks to the public.
Despite these hiccups, Honda plans to team up with GM and Cruise to initiate driverless rides in Japan in early 2026.
What is the Prediction for GM Stock?
Overall, the Street has a Moderate Buy consensus rating on General Motors. The average GM price target of $48.64 implies a mouth-watering 74% potential upside. Amid mounting woes, GM shares have tanked by nearly 17.5% so far this year.
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