Auto Stock Roundup: NAV’s Q3 Loss & GM’s Deals With Nikola and Uber

The highlight of the past week was General Motors’ GM strategic alliance with Uber and Nikola, in a bid to step up its efforts toward an electrified future. Meanwhile, in a sharp reversal of its recent hot streak, Tesla TSLA declined 10.9% last week, after missing out on a place in the S&P 500 Index. In fact, shares of the electric vehicle maker marked the biggest daily percentage drop on record last Monday. Navistar International NAV also made headlines as Traton SE sweetened its bid to buy out the rest of the Illinois-based truck manufacturer. 

(Read the Last Auto Stock Roundup here)

Recap of the Week’s Most Important Stories

General Motors and Nikola Corporation NKLA entered into a strategic alliance. Per the partnership, General Motors will aid Nikola in engineering and manufacturing its Badger, a fully-electric and hydrogen fuel-cell electric pick-up truck. As part of the deal, General Motors will acquire an 11% stake worth $2 billion in Nikola.

General Motors also collaborated with Uber Technologies UBER, per which, it is offering the ride-sharing company’s drivers a discount on the purchase of its new Chevrolet Bolt. The drivers will get employee pricing on the Bolt and 20% off on Bolt charging accessories. This partnership is another move by General Motors to expand its share in the electric vehicle market.

The U.S. auto giant is set to launch its latest wireless battery management technology, which will be installed in the company’s third-generation electric vehicles equipped with Ultium batteries. General Motors claims to have debuted as an automaker to incorporate a completely wireless battery management system for building electric vehicles.The latest system, developed with Analog Devices Inc., will enable the company to power many different types of electric vehicles from a common set of battery components.

Navistar reported third-quarter fiscal 2020 adjusted loss of 8 cents per share, narrower than the Zacks Consensus Estimate of a loss of 16 cents. The bottom line, however, tailed off from the year-ago profit of $1.47 per share. The coronavirus pandemic-led sluggish economy and depressed demand for vehicles dragged down profits. The truck maker registered revenues of $1,675 million for the July-end quarter, which missed the Zacks Consensus Estimate of $1,889 million. Moreover, the top line marked a 44.9% year-over-year plunge due to the coronavirus pandemic outbreak.

Meanwhile, Navistar’s merger talks with Volkswagen’s VWAGY trucks arm Traton SE are gathering steam. Notably, Traton already owns around 17% stake in Navistar. Traton has boosted its takeover bid for the rest of the Illinois-based truck maker to $43 per share from $35 offered in January 2020. The revised offer values the portion of the stock that is not already owned by Traton at around $3.6 billion. Navistar’s board of directors and management team are currently evaluating the revised proposal of Traton. If the acquisition goes through, it would enable Volkswagen to secure a strong position in the U.S. heavy-truck market — the largest market for the truck industry — and position it better than European peers including Daimler AG DDAIF and Volvo Group.

Price Performance

The following table shows the price movement of some of the major auto players over the past week and six-month period.

In the past six months, all stocks have increased, with Tesla being the maximum gainer. In the past week, shares of Tesla, Toyota and Honda have declined. Tesla has registered the maximum loss in the said period.

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Navistar International Corporation (NAV): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

Daimler AG (DDAIF): Free Stock Analysis Report

Tesla, Inc. (TSLA): Free Stock Analysis Report

Uber Technologies, Inc. (UBER): Free Stock Analysis Report

Volkswagen AG (VWAGY): Free Stock Analysis Report

Nikola Corporation (NKLA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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