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GM CEO Mary Barra: Our $2 billion deal with Nikola ‘validates’ our electric vehicle technology – Yahoo Tech

grabbing deal with buzzy electric truck startup Nikola, GM Chairman and CEO Mary Barra has probably finally earned a key element among the Wall Street community.” data-reactid=”16″ type=”text”>With one headline grabbing deal with buzzy electric truck startup Nikola, GM Chairman and CEO Mary Barra has probably finally earned a key element among the Wall Street community.

NKLA) announced Tuesday it has selected GM (GM) to be its manufacturing parter for its electric pickup truck dubbed the Badger. The Badger will use GM’s widely acclaimed Ultium battery technology. Additionally, Nikola will hand over $2 billion in stock to GM — giving the automaker an 11% stake in the company. An added wrinkle that is no less important: GM’s battery and hydrogen fuel cell technology will be used in Nikola’s commercial trucks.” data-reactid=”22″ type=”text”>Nikola (NKLA) announced Tuesday it has selected GM (GM) to be its manufacturing parter for its electric pickup truck dubbed the Badger. The Badger will use GM’s widely acclaimed Ultium battery technology. Additionally, Nikola will hand over $2 billion in stock to GM — giving the automaker an 11% stake in the company. An added wrinkle that is no less important: GM’s battery and hydrogen fuel cell technology will be used in Nikola’s commercial trucks.

Shares of Nikola and GM rose 40% and 8%, respectively, on the tie-up.

told Yahoo Finance’s The First Trade.” data-reactid=”24″ type=”text”>“We see this as an incredibly important day because it’s a validation of our technology, both our battery electric technology as well as our fuel cell technology,” Barra told Yahoo Finance’s The First Trade.

Up until now, the argument could be made the Street didn’t want to give GM any validation on its electric vehicle technology. Despite the strong performance metrics of GM’s Ultium technology and plans to release 20-plus new EVs by 2023, GM’s stock has dropped about 16% this past year. That’s in the face of the meteoric rise in Tesla’s stock (up 683%) and a well-received public market debut this summer of Nikola.

GM’s market cap prior to the deal with Nikola stood in the low $40 billion area whereas Tesla’s has climbed to $332 billion.” data-reactid=”26″ type=”text”>GM’s market cap prior to the deal with Nikola stood in the low $40 billion area whereas Tesla’s has climbed to $332 billion.

That valuation disconnect has led to some on Wall Street — namely analysts at Deutsche Bank —to clamor for Barra to spin off the electric vehicle business. Deutsche Bank estimated recently GM’s EV business could be worth in the $15 billion to $100 billion range. Barra fanned that speculation a bit on the company’s second quarter earnings call, telling analysts everything is “on the table” to drive shareholder value.

Mary Barra

Barra remained open-minded in the interview with Yahoo Finance.

“Well, we’re focused on creating long-term value. And I’ve always said that that’s our focus. And we’re going to do what’s right fo

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