The value of GM stock experienced noteworthy growth following the automaker’s announcement of a new, strategic partnership with electric truck startup Nikola.
GM stock opened Tuesday, September 8th at $31.72, saw a peak of $33.33, and closed the day at $32.38 for a gain of 7.3 percent compared to Friday’s closing value of $30.00. Conversely, Nikola’s stock experienced an even greater surge of nearly 41 percent, closing at $50.05, compared to $35.55 on Friday.
As a reminder, U.S. stock exchanges were closed yesterday – September 10th, 2020 – in recognition of the Labor Day holiday.
The gains for GM (NYSE: GM) bring its market cap to $46.34 billion, while Nikola shares (NYSE: NKLA) have a market cap of $18.97 billion.
Notably, the news comes less than a week after GM announced that it has entered a strategic alliance with Honda to share its Ultium batteries with the Japanese automaker, along with its BEV3 global electric vehicle platform and connected technology such as OnStar and V2X, among other tech. Due to the immense costs associated with developing and producing electric and semi- or fully-autonomous vehicles, such partnerships are likely to be all the more common in the automotive industry going forward.
For GM, it appears that investors welcome the idea of the automaker spinning off its electric vehicle business.
GM plans to roll out an onslaught of electric vehicles over the next few years, including a Chevrolet EV pickup truck, a midsize Chevy electric car, an electric van, five electric Cadillac models, two GMC Hummer EVs, plus two electric Buick crossovers. The efforts will be spearheaded by three models: the GMC Hummer EV SUT (pickup truck) and SUV and the Cadillac Lyriq midsize luxury crossover revealed in August in show car form. It is expected that all of these vehicles will be produced at the GM Detroit-Hamtramck plant – a facility dedicated to exclusively producing electric vehicles.
Additionally, The General will soon bring to market the upcoming Chevrolet Bolt EUV – a slightly larger version of the existing Chevy Bolt EV. For its part, the Bolt EV will be refreshed for the 2022 model year. Both models will be produced GM Lake Orion plant near Detroit in 2021. As such, the Orion facility will also exclusively produce electric cars.
With the Nikola tie-up, GM and its investors seem poised to capitalize on the imminent market shift to electric cars. The stakes, along with the expectations, are certainly high.