What happened

Shares of several companies involved with electric commercial vehicles were trading lower on Monday, after electric big-rig start-up Nikola (NASDAQ:NKLA) announced a deal with General Motors (NYSE:GM) that fell far short of investors' expectations.

Here's where things stood for these three companies as of 11:30 a.m. EST, relative to their closing prices on Friday:

  • Hyliion Holdings (NYSE:HYLN) was down about 15.9%.
  • Lordstown Motors (NASDAQ:RIDE) was down about 6.8%.
  • Workhorse Group (NASDAQ:WKHS) was down about 4.3%.

So what

Nikola's stock opened sharply lower on Monday after the company announced a tentative deal with GM, in which GM will sell hydrogen fuel cells to Nikola and assist with integrating the units into Nikola's electric semitrucks.

The deal, while not nothing, fell far short of the original Nikola-GM partnership announced in September. Under that now-moot deal, GM would have taken a $2 billion stake in Nikola, supplied both fuel cells and electric-vehicle batteries to the start-up, and engineered and manufactured Nikola's Badger electric pickup.

That original deal was put on hold just a few days after it was announced, when short-seller Hindenburg Research alleged that Nikola and founder Trevor Milton had misled investors by exaggerating the state of its technology. 

For Hyliion, which is gearing up to offer hybrid and electric heavy-truck powertrains, Nikola's deal with GM, while scaled back, does mean that Nikola will be more or less a direct competitor, offering completed semis built on chassis from CNH Industrial's (NYSE:CNHI) Iveco heavy-truck subsidiary. 

A prototype Lordstown Endurance electric pickup truck.

Lordstown's Endurance pickup won't have to compete against Nikola's Badger, which has been canceled. But can it still count on help from GM? Image source: Lordstown Motors.

For Lordstown, which operates in a former GM factory and counts GM among its investors and advisors, the scaled-back deal with Nikola might have auto investors questioning GM's commitment to working with electric-vehicle start-ups. While there has been no indication that GM is moving away from its efforts to help Lordstown get its electric Endurance pickup into production, investors' concerns are understandable.

Workhorse owns 10% of Lordstown, and it's presumably down on similar concerns.

Now what

While the scaled-back deal with GM certainly will have an impact on auto investors' expectations for Nikola, it doesn't necessarily mean anything for any of these three companies. (If anything, it might be a boon for Lordstown, which won't have to compete with the now-canceled Badger pickup.)

The market for electric commercial vehicles still very much exists, and is nearly certain to grow dramatically over the next decade. If that's why you owned any of these three stocks, the Nikola news isn't a reason to sell.

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.