General Motors (GM) and Nikola struck a deal: the American auto giant will build the startup’s hydrogen-powered pickup truck (The Badger) and take an 11% stake in the company.
For Nikola, this means access to decades of auto engineering experience and a concrete position in the eyes of investors. For GM, it’s a union with one of the EV world’s most prominent startups.
Nikola founder Trevor Milton said:
Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn’t dream of a better partnership than this.
By joining together, we get access to their validated parts for all of our programs, General Motors’ Ultium battery technology and a multi-billion-dollar fuel cell program ready for production. Nikola immediately gets decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering, and investor confidence.
Most importantly, General Motors has a vested interest to see Nikola succeed. We made three promises to our stakeholders and have now fulfilled two out of three promises ahead of schedule. What an exciting announcement.
General Motors Chair and CEO Mary Barra said:
This strategic partnership with Nikola, an industry-leading disrupter, continues the broader deployment of General Motors’ all-new Ultium battery and Hydrotec fuel cell systems.
We are growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability. In addition, applying General Motors’ electrified technology solutions to the heavy-duty class of commercial vehicles is another important step in fulfilling our vision of a zero-emissions future.
GM will be providing the services of validating, engineering, homologating and manufacturing the Badger on Nikola’s behalf. Nikola will take care of the marketing, sales, service, and maintenance.
GM will also be supplying the Ultium batteries and Hydrotec fuel cell technology. In the end, the Badger will essentially be a GM electric-hydrogen vehicle with a Nikola body.
Analysts are calling the arrangement a “major strategic bet” for both companies.
Wedbush analysts Dan Ives was quoted by Marketwatch as saying:
There have been many skeptics around Nikola and its founder’s ambitions over the coming years, which now get thrown out the window with stalwart GM making a major strategic bet on Nikola for the next decade on the EV and fuel cell front.
All contracts under the deal are on a cost-plus basis, meaning GM is guaranteed a profit even if Nikola loses money. Furthermore, GM will be able to claim US EV tax credits again.
The Nikola Badger will make its public debut at Nikola World 2020 this December in Arizona. It will go into production in late 2022.
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