FILE PHOTO: TomTom logo is seen on a vehicle in Eindhoven, Netherlands, November 21, 2019. REUTERS/Eva Plevier/File Photo
November 17, 2021
AMSTERDAM (Reuters) – Shares in Dutch navigation and mapping company TomTom closed 9.3% higher on Wednesday, after the European Union published rules specifying that cars must incorporate a technology that the company supplies, starting in 2022.
TomTom works with carmakers to provide the technology that helps drivers comply with speed limits, called “intelligent speed assistance.”
The publication in the Official Journal of the European Union https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2021:409:TOC specified that new car models must use the technology starting in July 2022, and all cars sold must have it by 2024.
Chief Executive Harold Goddijn was scheduled to meet with investors at a conference during the day, though it was not clear whether he discussed potential financial benefits to the company.
A spokesperson for TomTom could not immediately comment.
Sebastian Marland, an equity research analyst at AFS Group, said he believed the news was the trigger for the stock’s surge.
“This creates a momentary opportunity for TomTom as it provides the tech required to ‘add-on’ to the cars,” he said.
However, “from 2024 onwards, all cars in the EU must have it installed, making TomTom’s tech redundant in the long term.”
Shares closed at 7.92 euros in Amsterdam.
(Reporting by Danilo Masoni and Toby Sterling in Amsterdam; Editing by Matthew Lewis)
Source: One America News Network
