Nikola surges 29% as GM backs EV regulations and investors speculate a deal between the two companies is near

• Electric-truck company Nikola gained as much as 29% on Tuesday after General Motors announced its no longer supporting the Trump administration's efforts to bar California from setting its own emissions regulations.
• California's authority to set its own fuel regulations will likely boost the EV industry, as will GM's new plan to increase spending on EVs and work with Biden to promote the industry.
• Investors are also speculating that Nikola and GM are close to reaching a deal that would place GM has the sole supplier of fuel cells for Nikola's line of semi-trucks. The deal hasn't been finalized yet.
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Shares of the electric-truck company Nikola surged as much as 29% on Tuesday after General Motors announced its no longer supporting the Trump administration's efforts to bar California from setting its own emissions regulations.

California's authority to set its own fuel regulations will likely boost the electric-vehicle industry, as will GM's new plan to increase spending on EVs and work with president-elect Joe Biden to promote the industry.

"We are confident that the Biden Administration, California, and the U.S. auto industry, which supports 10.3 million jobs, can collaboratively find the pathway that will deliver an all-electric future," said GM CEO Mary Barra, the Wall Street Journal reported.

The Nikola stock surge also comes as investors speculate that Nikola and GM may be close to finalizing a partnership.

Last Wednesday, shares of Nikola soared as investors circulated a page from GM's website that mentioned the announcement of its partnership with Nikola, potentially causing confusion that the a had already been reached. The partnership hasn't been finalized, but Barra told Bloomberg in early November that the talks between the two companies are ongoing.

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According to GM's website, the auto giant has signed an agreement with Nikola to engineer and manufacture the Nikola Badger truck using a GM battery system, and to be the exclusive supplier of fuel cells for Nikola semi-trucks, but nothing has yet been finalized.

When GM announced last Thursday that its planning on increasing spending on electric and autonomous vehicles by 35%, the auto maker made no mention of Nikola.

Shares of Nikola are up 243% year-to-date.