Why Hyliion, Lordstown Motors and Workhorse Group shares are down today

What happened

Shares of several companies involved in electric utility vehicles were trading lower on Monday, after the big electric platform started Nikola (NASDAQ: NKLA) announced an agreement with General Motors (NYSE: GM) which was well below investor expectations.

Here’s where things stood for these three companies at 11:30 a.m. EST, compared to their closing prices on Friday:

So what

Nikola’s stock opened sharply on Monday after the company announced a tentative agreement with GM, in which GM will sell hydrogen fuel cells to Nikola and help integrate the units into Nikola’s electric semi-trailers.

The deal, while not nothing, fell far short of the original Nikola-GM partnership announced in September. As part of the now-moot deal, GM is said to have taken a $ 2 billion stake in Nikola, supplied fuel cells and electric vehicle batteries to the start-up, and designed and manufactured the Nikola’s Badger electric pickup. .

That initial deal was put on hold just days after it was announced, when short seller Hindenburg Research alleged Nikola and founder Trevor Milton misled investors by overstating the state of its technology.

For Hyliion, which is gearing up to offer heavy-duty hybrid and electric-truck powertrains, Nikola’s deal with GM, while reduced, means Nikola will be more or less a direct competitor, offering semi-finished chassis built on chassis. CNH Industrial (NYSE: CNHI) Heavy goods vehicle subsidiary Iveco.

For Lordstown, which operates out of a former GM plant and counts GM among its investors and advisers, the reduced deal with Nikola could cause auto investors to question GM’s commitment to working with electric vehicle start-ups. While there is no indication GM is straying from its efforts to help Lordstown bring its Endurance electric pickup into production, investor concerns are understandable.

Workhorse owns 10% of Lordstown, and he’s likely down on similar concerns.

Now what

While the reduced deal with GM will certainly impact auto investor expectations for Nikola, it doesn’t necessarily mean anything to any of these three companies. (If anything, it could be a boon to Lordstown, who won’t have to compete with the now canceled Badger pickup.)

The market for electric utility vehicles still exists and is almost certain to grow significantly over the next decade. If that’s the reason you owned any of these three stocks, Nikola’s news isn’t a reason to sell.