A Hyundai Success Demonstrates Why GM May be Looking at Spinning Off an EV Brand

We shared a report with you last week suggesting that GM might be looking at creating another brand for electric vehicles. If you were at all curious why the idea might appeal to a company with quite a few EVs already, Hyundai’s stock price is an indication of why.

Hyundai announced Sunday that it would spin off its Ioniq model into a sub brand with three shiny new vehicles. As per our pals over at TTAC:

The Korean automaker claims the Ioniq brand will cover three distinct electric models sharing the same E-GMP (Electric Global Modular Platform) architecture.

The models, slated to land starting early next year, include an initial midsize SUV called Ioniq 5. That’ll be followed up with, what else, the Ioniq 6 sedan in 2022. Coming on the heels of that introduction is the Ioniq 7, a “large” SUV due in 2024.

Hyundai claims the trio of models “will have a common theme of ‘Timeless Value’.”

Timely value, too, it turns out because investors are eating it up.

Reuters reported today that Hyundai achieved its best share price since 2017 today. The price jumped as much as 10% as compared to Friday. We have to imagine GM is looking on with interest.

On Thursday, Bloomberg wrote that “GM now is war-gaming the idea as the company ponders different ways to get credit for its EV plans.” Now, the report went on to mention that a spinoff isn’t actively being prepared but it’s certainly looking like a good idea.

GM need only look across town, though, to see why big announcements surrounding EVs aren’t a guaranteed path to stock price success. Ford, which despite announcing an exciting new electric Mustang thing currently has a very low valuation.

Whether or not GM thinks the investment in a new brand is worth the stock bump that an announcement will get it remains to be seen but we have faith in GM’s accountants’ ability to count beans.

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