CEO Mary Barra spoke with RBC analyst Joseph Spak at an investor conference on Monday. The conversation eventually turned to the deal just made.
—And his comments might have helped Nikola stock regain ground lost following a short seller’s report.
Nikola (ticker: NKLA) is a big deal for General Motors (GM) investors these days after the pair announced a wide collaboration last week. GM takes a stake in the pioneer of alternative fuel trucking and provides manufacturing and engineering support for Nikola. GM will also supply battery and fuel cell components for Nikola products.
Nikola released a six-page document on Monday refuting Hindenburg’s claims. Nikola’s shares traded early on Tuesday, but rose nearly 12% as of 1:30 p.m.
Barra’s conference comments could have helped the Nikola share rebound.
“Our company has therefore worked with many different partners and we [a] a very, very capable team who have done due diligence, ”Barra said when asked about the terms of the Nikola deal. “Based on the deal we have made, it validates our technology, it allows us to have more people using the technology, which gives us the advantage of scale and will help us reduce costs.” . And then from a fuel cell perspective, using Hydrotec fuel cell technology, and entering a new segment for us, a growing segment, again validating our fuel cell technology.
When asked why to build a competitor’s truck, Barra replied, “We find this to be another opportunity for General Motors. I mean, I think the industry has been… accused in the past of not being as efficient as it could be with technology and of leveraging engineering and capital. So the partnership we have with Nikola, and
moreover, does exactly that. It takes advantage of this technology. Instead of everyone doing a slightly different version of it, this will include royalties, licenses or revenue in many different forms coming to General Motors, as well as cutting costs as the whole industry transforms and switches to EV models. Barra says GM is committed to an all-EV future.
GM partners with Honda on autonomous driving and fuel cell technologies.
GM referred Barron’s to public statements made after the Nikola deal was signed when we asked for comments on the short selling report last week. GM referred Barron to Nikola when asked about the rebuttal.
Since announcing its intention to become a publicly traded company by merging with SPAC, Nikola, shares have risen nearly 180%, better than comparable returns from the
Dow Jones Industrial Average
over the same duration.
Since the start of the year, GM’s stock is down about 14%.
Spak covers both Nikola and GM stocks. It rates GM shares the purchase and has a price target of $ 44 for the share. He values Nikola Hold stocks and has a target price of $ 49 for the stock.
Write to Al Root at [email protected]