What happened
Shares of Northern Genesis Acquisition (NGA) were trading higher on Monday morning. Northern Genesis is a special-purpose acquisition company (SPAC) that is preparing to merge with Canadian electric-vehicle maker Lion Electric, which announced on Monday that it will build a battery factory in Quebec.
As of 11 a.m. EDT today, Northern Genesis's shares were up about 15.7% from Friday's closing price.
So what
Lion Electric is a maker of battery-electric trucks and buses. The company is probably best known for its electric school buses, which are being evaluated by a number of school districts in the U.S. and Canada.
Lion Electric's new factory will be able to make battery packs for about 14,000 trucks and buses per year. Image source: The Lion Electric Company.
Lion Electric said on Monday that it plans to produce its own battery packs and modules starting in 2023, at a new factory in Quebec. Lion Electric is spending about 185 million Canadian dollars ($148.1 million) of its own money on the factory, along with another CA$100 million ($80.1 million) from the Province of Quebec and Canada's federal government.
The factory will have annual production capacity of 5 gigawatt-hours, enough for about 14,000 medium- and heavy-duty vehicles per year. Lion said that it expects its new factory to reduce its manufacturing costs and give it more control of its supply chain.
The new factory will also house an "innovation center" focused on research and development, Lion said.
Now what
Electric-vehicle investors will recall that Lion struck a deal to buy battery packs from Romeo Power (RMO) in November; it wasn't immediately clear how this new factory will affect that relationship.
Northern Genesis and Lion expect to complete their merger by the end of March, after which the combined company will trade as Lion Electric under the ticker symbol LEV.
