Please ensure Javascript is enabled for purposes of website accessibility

Why Northern Genesis Acquisition Stock Is Higher Today

By John Rosevear - Mar 15, 2021 at 11:35AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

News of a new Lion Electric battery factory is pushing the stock higher.

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. 

A Lion Electric school bus, shown parked and recharging.

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 -8.65%) 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. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Northern Genesis Acquisition Corp. Stock Quote
Northern Genesis Acquisition Corp.
NGA
Romeo Power, Inc. Stock Quote
Romeo Power, Inc.
RMO
$0.92 (-8.65%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.