Following the news that General Motors has taken an 11% stake and struck an agreement to share technology with electric truck start-up Nikola;
David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:
“The tie-up with Nikola follows the announcement last week that GM and Honda would deepen their collaboration in advanced electrification technologies.
“The recent uptick to GM’s share price shows that investors are impressed by the latest moves from this automotive giant and its efforts to position itself at the forefront of a rapidly developing part of the automotive business landscape.
“A spin-off of GM’s electrification operations could conceivably create a new company that would be highly attractive to investors – more so than GM in its current form.
“The opportunity is certainly there to explore and GM has readily identifiable assets – for example in its Ultium battery tech – that could be hived off to flourish independently.
“The meteoric rise of Tesla and its market cap point to strong investor appetite for companies perceived to be at the apex of transformational technological change.
“The auto industry stands at an inflection point in its long-term development as advanced technologies and disruptive business models combine to threaten the established order. Sweeping structural change is inevitable and the companies that grasp this early for successful execution stand a good chance of being competitive winners.”