General Motors downgraded to Underweight from Overweight at Wells Fargo

Wells Fargo analyst Colin Langan double downgraded General Motors to Underweight from Overweight with a price target of $33, down from $74. Battery electric vehicle costs have “massively risen” and raw material supply is tight, yet tough U.S. regulations likely require more BEV sales, Langan tells investors in a research note. The analyst says the raw material increase adds $12,600 in unplanned costs to GM’s SilveradoEV. More importantly, GM relies on large pickups for over 40% of its profits historically, making possible substitution away from the combustible engine Silverado to the electric version a “material risk,” writes the analyst. In addition, he sees headwinds from price normalization, inflationary costs and the 2023 UAW contract negotiations.