In recent months, investors have been swarming with excitement over potential new electric vehicle (EV) models and further technological developments. However, General Motors (NYSE:GM) shook up the scene today after announcing that it acquired a 25% stake in Pure Watercraft, an electric outboard motor and boat producer. The deal is estimated to be valued at $150 million.
Pure Watercraft is a startup based in Seattle. Its flagship product is an electric outboard motor powered by lithium ion batteries. The motor emits less noise than a traditional fuel-powered motor and has as much power as a 50 horsepower gas motor. Furthermore, Pure Watercraft’s CEO, Andy Rebele, states that “Our system delivers more than double the propulsion per pound of our best competitors.” Upon completion of the transaction, General Motors will become one of Pure Watercraft’s suppliers and provide decades’ worth of design and engineering expertise.
The products sold by Pure Watercraft aren’t cheap. Packages on the Pure Watercraft website have a price range of $16,500 to $37,500. Interested consumers can buy the standalone electric outboard engine for $16,5000, or shell out a few extra thousand for a boat that comes included with the engine. It’s not yet known whether the price will change after General Motor’s acquisition.
You may be thinking, “Why boats?” Well, according to the National Marine Manufacturer’s Association (NMMA), U.S. outboard engine sales reached a record high during 2020. The estimated 2020 sales figure of $3.4 billion rose for the ninth consecutive year. Investors in GM stock should be pleased that the company is expanding its optionality.
What’s Next for GM Stock?
General Motors is following its “all-in-one electrification” stance. The company stated that they aim to produce only EVs by 2035, phasing out diesel and gasoline-powered vehicles. However, as General Motors works to reduce emissions, other competitors are following suit. Even though General Motors was one of the first automakers to enter the electric market, it is still playing catchup to Tesla (NASDAQ:TSLA).
While investors are excited about the Pure Watercraft acquisition, it will likely only make up a small portion of General Motor’s revenue. Nevertheless, the acquisition is great news for a company that seemingly has its eyes set on an all-electric future.
On the date of publication, Eddie Pan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.