GM Is Getting Into Electric Boats in a $600 Million Deal
The General Motors logo on the world headquarters building.
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GM (ticker: GM) announced Monday it purchased a 25% stake in Pure Watercraft, “a Seattle-based company that specializes in creating all-electric boating solutions.”
GM is paying $150 million in cash and services, which values the boating company at $600 million. Yes, GM is moving into the electric boat space.
GM, of course, has big ambitions in electric cars and trucks. It is spending about $35 billion between 2021 and 2025 on vehicle electrification, pushing out about 30 new EV models over that span. What’s more, GM wants to be an all-electric car company by 2035.
Why boats is still an open question. Operating an electric boat probably requires enhanced sealing and safety technology. It isn’t a great idea to get batteries wet. GM wasn’t immediately available to comment on the acquisition.
In the press release, GM vice president of global electrification, Dan Nicholson, commented: “GM’s stake in Pure Watercraft represents another exciting opportunity to extend our zero-emissions goal beyond automotive applications,” adding it builds on the company’s strategy to deploy its electric technology beyond cars.
GM stock might be reacting to the news. Shares were up 3.7% in midday trading. The
Dow Jones Industrial Average
were up about 0.5 % and 0.6%, respectively.
That move added roughly $3 billion to GM’s market capitalization. The electric-boat market probably isn’t that big yet. The deal is for $150 million and the split between cash and payment-in-kind related to GM’s manufacturing expertise wasn’t disclosed.
Payment-in-kind shouldn’t be a big surprise to investors. Any aspiring maker of transportation equipment can benefit from an auto maker’s supply chain and manufacturing skill. GM, don’t forget, will generate roughly $150 billion in 2022 sales and spend almost $10 billion in capital on its global operations.
Car makers, in terms of their overall economic impact and scale of their operations, are huge.
Write to Al Root at email@example.com