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After a difficult month, Stellantis (NYSE:STLA) just offered investors a reason to be optimistic. The prominent automaker has been struggling for weeks as the United Auto Workers (UAW) strike drags on. But yesterday, the company announced that it will be joining forces with nuclear fuel company Orano to help recycle end-of-life electric vehicle (EV) batteries as well as other waste that stems from its production facilities. This news isn’t necessarily an immediate catalyst for STLA stock, but it has still provided a needed bump for the company that has spent the past week trending downward due to news of the UAW efforts expanding to a large Stellantis plant in Michigan.
Does this mean that STLA stock is likely to start making progress again in the near future even if labor tensions persist? Let’s take a closer look at this news and assess what investors should be expecting as the company prepares to venture further into the EV battery space.
What’s Happening With STLA Stock
As noted, STLA stock is in the throes of a difficult season as the UAW strike rages on. None of the automakers has reached a settlement with the union, creating negative momentum for the entire sector.
Ironically, Stellantis is an automaker that hasn’t embraced EVs as much as peers Ford (NYSE:F) and General Motors (NYSE:GM). In fact, it even went so far as to blame the EV trend for its layoffs in December 2022.
But now, the company appears to be seeking out new ways to offer investors exposure to the growing market. The memorandum of understanding could help both companies as they work to expand and streamline operations. Per a statement released by Stellantis:
“The joint venture is based on an innovative low-carbon process developed by Orano, breaking with existing processes allowing on the one hand the recovery of all the components of lithium-ion batteries and on the other hand the manufacture of new materials for cathodes. This joint venture will also produce materials known as “black mass” or “active mass”. The mass thus obtained can be refined in the future Orano hydrometallurgical site planned in Dunkirk, France, then reused in batteries, thus closing the loop of the circular economy.”
If the partnership moves forward, it could certainly provide a boost for STLA stock. EV battery recycling is an important field, and it is crucial to automakers who want to keep scaling production. Given Stellantis’ global presence, the joint venture could end up benefiting both companies significantly.
On the date of publication, Samuel O’Brient did not hold (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.