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Why Lightning eMotors Stock Soared Today

What happened

Technology stocks and the Nasdaq Composite index may be moving down more than 2.5% today, but one name in the electric vehicle (EV) sector is bucking the trend. The stock of vehicle electrification company Lightning eMotors (NYSE:ZEV) soared as much as 27.4% early Thursday after it announced an agreement with General Motors. While it pared down some of those gains, Lightning eMotors shares remained up 11% as of 2:05 p.m. ET.

So what

The companies agreed to collaborate to provide fully electric Class 3 through Class 6 commercial fleet vehicles for GM customers. General Motors will provide the truck platforms, and Lightning eMotors will electrify medium-duty vehicles to create zero-emission solutions for fleet vehicles “which can be used for several vehicle applications like school buses, shuttle buses, delivery trucks, work trucks and more,” according to a company statement. 

Stock chart showing rising price in zigzag form.

Image source: Getty Images.

Now what

While the companies didn’t reveal any quantitative value for the agreement, it clearly is a boon for a company like Lightning eMotors with a market cap of only $338 million. The company says the deal makes it the first designated GM Specialty Vehicle Manufacturer (SVM) to provide fully electric, medium-duty commercial vehicles. 

Lightning eMotors’ CEO and Co-Founder Tim Reeser said in a statement, “GM’s inclusive approach to electrification is a great match for Lightning’s position and role as a leading powertrain supplier in the commercial vehicle space.” 

The agreement also provides GM another avenue as it invests $35 billion through 2025 in its transition to manufacture electric and autonomous vehicles, and its goal to be all-electric by 2035. Investors in Lightning eMotors are happy to play a role in helping the automotive giant reach that goal.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Read More: Why Lightning eMotors Stock Soared Today

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