Why Allison Transmission Stock Is Trading Higher During Tuesday's After-Hours Session

Shares of Allison Transmission Holdings Inc. ALSN surged higher following a company announcement that it was selected by American Rheinmetall Vehicles to develop the Next Generation Electrified Transmission for future U.S. Army ground combat vehicles.

The company highlighted that defense tracked and wheeled vehicle electrification continues to garner interest as well as U.S. government investments due to the emerging technology’s numerous benefits which include silent mobility to reduce enemy detection, exportable power provisions for both on-board and off-board systems, and flexible operational modes for a variety of performance and fuel economy demands.

Allison Transmission Holdings Vice President for Defense Programs disclosed the company’s focus on, “powering the U.S. Army’s Optionally Manned Fighting Vehicle (OMFV) a tracked vehicle program that could be the Army’s largest vehicle procurement in over four decades” with volume estimates at nearly 4,000 vehicles. The Electrification process will enhance soldiers’ effectiveness in multi domain operations to augment vehicle performance.

The company’s electrification portfolio also includes the Transmission Integral Generator (TIG) which provides up to 120kW of electrical power to reduce reliance on traditional towable generators which underwent rigorous testing by the Ground Vehicle Systems Center last year and was named the 2020 Military and Aerospace Electronic Innovators Platinum Award winner.

Allison Transmission Holdings is the world’s largest manufacturer of fully automatic transmissions for commercial vehicles, which serve as fuel-saving alternatives to less expensive manual and automated manual transmissions. For its on-highway business, Allison maintains 60% of the global market share in which the company’s transmissions are incorporated into class 4 through class 8 trucks.

At the time of publication, shares of Allison Transmission Holdings were trading 9.69% higher during after hours at $39.50, extending the day’s gain of 0.31%. The stock has a 52-week low of $33.93 and a 52-week high of $46.40.