Here's Why Automakers Are Reviving Extended-Range EVs despite Initially Flopping
Major automakers are bringing back a type of hybrid vehicle that had mostly disappeared from the U.S. a few years ago. Known as extended-range electric vehicles (EREVs), these plug-in hybrids work mainly like electric vehicles (EVs) by using a battery-powered motor to drive. However, they also have a small gas engine that acts like a generator to recharge the battery when needed, which is different from regular hybrids, where the gas engine helps power the car directly. As a result, EREVs have bigger batteries and smaller gas engines that focus more on electric driving with gas as a backup.
Confident Investing Starts Here:
Interestingly, it is worth noting that earlier models, such as the Chevy Volt (GM) and BMW i3 (BAMXF), never sold well, and EREVs have mostly vanished after 2022. Nevertheless, Ram (STLA) is planning an EREV pickup truck in 2026 that can go up to 690 miles using both gas and electric power. Volkswagen (VWAGY), Jeep, and Nissan (NSANY) are also working on their own EREV models. These vehicles are useful for people who drive long distances or live in places without easy access to charging, which helps reduce range anxiety while keeping costs lower than full EVs.
In fact, EREVs are cheaper to make than full EVs because they use smaller batteries and are less complex than regular plug-in hybrids. They also hold their value better than gas cars or full EVs, which lose most of their resale value within five years. In addition, sales of hybrids and plug-in hybrids are growing faster than fully electric cars, especially as more buyers focus on price and practicality. Therefore, EREVs may help more drivers transition to electric vehicles while avoiding issues like limited charging infrastructure or high upfront costs.
Which Auto Stock Is the Better Buy?
Turning to Wall Street, out of the stocks mentioned above, analysts think that STLA stock has the most room to run. In fact, STLA's average price target of $10.98 per share implies more than 8% upside potential. On the other hand, analysts expect the least from BAMXF stock, as its average price target of $92.82 equates to a gain of 5%.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
Why You Might Be Interested In General Motors Company (NYSE:GM) For Its Upcoming Dividend
It looks like General Motors Company (NYSE:GM) is about to go ex-dividend in the next 4 days. Typically, the ex-dividend date is one business day before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important as the process of settlement involves a full business day. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase General Motors' shares before the 6th of June in order to receive the dividend, which the company will pay on the 19th of June. The company's upcoming dividend is US$0.15 a share, following on from the last 12 months, when the company distributed a total of US$0.48 per share to shareholders. Looking at the last 12 months of distributions, General Motors has a trailing yield of approximately 1.0% on its current stock price of US$49.61. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether General Motors can afford its dividend, and if the dividend could grow. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. General Motors has a low and conservative payout ratio of just 6.8% of its income after tax. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Luckily it paid out just 3.8% of its free cash flow last year. It's positive to see that General Motors's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut. View our latest analysis for General Motors Click here to see the company's payout ratio, plus analyst estimates of its future dividends. Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, General Motors's earnings per share have been growing at 11% a year for the past five years. Earnings per share have been growing rapidly and the company is retaining a majority of its earnings within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later. Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. General Motors's dividend payments per share have declined at 8.8% per year on average over the past 10 years, which is uninspiring. It's unusual to see earnings per share increasing at the same time as dividends per share have been in decline. We'd hope it's because the company is reinvesting heavily in its business, but it could also suggest business is lumpy. Is General Motors an attractive dividend stock, or better left on the shelf? General Motors has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable. There's a lot to like about General Motors, and we would prioritise taking a closer look at it. So while General Motors looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Be aware that General Motors is showing 2 warning signs in our investment analysis, and 1 of those is potentially serious... A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 hours ago
- Yahoo
Sabres Add Former GM Kekalainen As Senior Advisor
Kekalainen's Hiring Another Sign Sabres GM's Time Could Be Nearing An End When the Buffalo Sabres announced Friday that former Columbus Blue Jackets GM Jarmo Kekalainen was joining the team as a special advisor to GM Kevyn Adams, a couple things became clear: firstly, it showed Kekalainen will be a highly-valued voice in the organization; but more importantly, it showed that Adams is more on the clock than ever -- and that Adams may have just hired the man who will succeed him if things don't go well for the team. 2:44 Now Playing Paused Ad Playing
Yahoo
a day ago
- Yahoo
3 Reasons to Buy This Top Auto Stock Before It's Too Late
General Motors has reduced its shares outstanding dramatically. GM is rapidly expanding its EV sales in the U.S. and lowering costs. The automaker's restructured business in China brought positive results. 10 stocks we like better than General Motors › General Motors (NYSE: GM) may be an afterthought when it comes to investments for many, but it may also be the best automotive stock for investors to get their hands on today. Not only does the company thrive with sales of full-size trucks and SUVs, but it's making strong progress with electric vehicles (EVs) and returning value to shareholders at an impressive clip. Here are three reasons GM might be the next stock you want to buy. There are two primary ways for companies to return value to shareholders: through a dividend or through share repurchases. In the case of share repurchases, as the company buys back shares and retires them, the earnings per share increases, which drives the value up. General Motors has been incredible at returning value to shareholders through share buybacks, and you can see how the stock price has responded as the number of shares outstanding declines. It started in late 2023, when GM announced a significant $10 billion accelerated share repurchase program, which was completed by the fourth quarter. GM approved a further $6 billion buyback in June 2024, and the automaker also increased its dividend by 25%. The automaker's cash flow is capable of handling such movements. GM generated $14 billion in adjusted automotive free cash flow in 2024 and returned roughly $7.6 billion to shareholders via dividends and buybacks, leaving plenty of liquidity for growth and strategic moves to offset tariff impacts. When it comes to EVs, it's not really a matter of if, but when they consume the roads globally. It's a tricky thing to balance sales of highly profitable gasoline-powered SUVs and trucks while trying to sell EVs, but General Motors has found a balance. While posting strong financial results driven by its internal combustion engine line, the company also posted EV sales up 94% during the first quarter, grabbing an impressive 10.4% market share in the U.S. That parks GM in the No. 2 spot for EV sales in the U.S., and marks Chevrolet as the industry's fastest-growing EV brand, driven by the Equinox and Blazer EVs. In even better news, roughly 60% of the EV buyers are trading in a non-GM vehicle, bringing more consumers into the brand. GM will still need to work diligently on reducing EV costs, especially batteries, for this to become an important chunk of its business, but it is the future of the industry, and GM is well-positioned in the U.S. for now. China's market has been engulfed in a brutal price war, driven by a plethora of competitors in a blossoming EV market, and foreign automakers have paid the price -- they are struggling in China right now, big time. Fortunately, GM recognized this early and made a massive restructuring effort, which included rightsizing operations, launching new vehicles, and optimizing dealer costs and inventory. All in, the charge would cost GM $5 billion in restructuring costs, but it did manage to report encouraging results in China during the final quarter of 2024. Following the introduction of new vehicles, sales sequentially surged 40% during the fourth quarter, the largest jump since the second quarter of 2022. As far as General Motors goes, the company is firing on all cylinders right now. Not only is it selling gasoline-powered vehicles at a high clip, and highly profitably, the company is expanding its EV prowess. It's also buying back shares at a clip so rapidly that its stock has only soared as a result. All this means General Motors is one of, if not the top, automotive stocks to buy now. Before you buy stock in General Motors, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and General Motors wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Daniel Miller has positions in General Motors. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy. 3 Reasons to Buy This Top Auto Stock Before It's Too Late was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
