After GM announced a partnership with emerging EV manufacturer Nikola Wednesday Tesla stocks took another tumble in what’s been an already bleak month for the previously unstoppable auto manufacturer. Tesla shares are down some 18% in what marks the companies second-biggest drop at the beginning of its second bear market this year. Following last Friday’s close, Tesla was then delivered another blow with a snubbing by the S&P 500, excluding it from the S&P 500 Index.
GM and Nikola have partnered with GM gaining 11% of Nikola and taking charge of the engineering process for their electric and hydrogen-powered Badger pickup truck. This announcement caused a 33% increase in Nikola’s valuation and the latest move by GM to expand into the electric vehicle market. General Motors will appoint one board member to Nikola and become the exclusive supplier of electric and hydrogen fuel cells for Nikola, excluding European markets.
While GM has been working on the GMC Hummer EV and Cadillac Lyriq, the Badger will share the same platform. The Badger is expected to hit American markets in 2022 and be powered by the new Hydrotec technology that GM has been working with Honda to develop.
“We are growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability,” said General Motors CEO Mary Barra. “This strategic partnership with Nikola … continues the broader deployment of General Motors’ all-new Ultium battery and Hydrotec fuel cell systems.”
With traditional auto manufacturers setting their sights on EV manufacturing, electric vehicles’ accessibility and popularity continue to rise. They may threaten what had become a market widely controlled by Tesla and their massively successful Model 3. While Tesla had become known as a luxury brand, its Cyber Truck announcement had the auto industry buzzing. GM and Nikola’s statement had a similar impact with many industry pundits concluding that the lower cost and broader appeal of models like the Badger may significantly shift the EV manufacturing market.
VEX remains committed to refining our manufacturing processes and determining the most sustainable methods without sacrificing quality or performance. As consumers’ interest in sustainability continues to grow, companies must evolve and decide what strategies they can employ to reduce carbon emissions and attempt to curb climate change, especially as unprecedented wildfires rage through the American West and cause trillions of dollars in destruction and suffering.