NEW YORK (TheStreet) -- Shares of General Motors (GM) - Get Report were increasing in late morning trading on Monday as Citigroup analysts said the company's recent partnership with Lyft to create a network of self-driving cars could propel it forward in the race to create autonomous vehicles.
Aside from proving technological capability, companies will need to obtain regulatory certification in order to offer driverless services, the firm said, according to Barron's.
Citigroup noted GM and Lyft have an upper hand over competitors as they can validate the performance of their autonomous fleets while also generating revenue.
However, competing partnerships like the recently announced Delphi Automotive (DLPH) and Mobileye (MBLY) collaboration, would probably find it too expensive to equip "high-volume passenger cars" with their proposed $5,000 autonomous system.
Operating their own validation fleet also isn't an option, Citigroup added, because Delphi and Mobileye would need drivers and "presumably lots of cars." As a result, their validation process will likely be more complicated.
"But anyone with car/ride share outlets (like Uber/Lyft) could obviously allow these cars to generate revenue while validating," the firm said in their analyst note, Barron's reports. "Having such outlets could therefore become an advantage in running larger validation fleets."
GM announced earlier this year that it was investing $500 million into the ride-sharing company Lyft. The investment values Lyft at approximately $5.5 billion.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates General Motors as a Buy with a ratings score of B-. This is driven by some important positives, which the team believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, increase in stock price during the past year and compelling growth in net income. The team feels its strengths outweigh the fact that the company has had generally high debt management risk by most measures that it evaluated.
You can view the full analysis from the report here: GM