General Motors picks up 11 % stake in EV maker Nikola

Nikola Corporation and General Motors Co. announced a strategic partnership with GM getting an 11% ownership in the company.

Nikola will exchange $2 billion in newly issued common stock for the in-kind services and access to General Motors’ global safety-tested and validated parts and components.

GM will get the Nikola Badger, the company’s fully-electric and hydrogen fuel cell electric pickup truck, and include cost reductions for other models – Nikola Badger, Nikola Tre, Nikola One, Nikola Two and NZT.

As part of the agreement, Nikola will utilize General Motors’ Ultium battery system and Hydrotec fuel cell technology, representing a key commercialization milestone for General Motors.

Nikola Electric Vehicles General Motors

Nikola Tre Truck (Image: Nikola)

Nikola will retain the sales and marketing aspect of the Badger and will retain the Nikola Badger brand.

“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,” said Nikola Founder and Executive Chairman Trevor Milton. “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 will engineer, homologate, validate and manufacture the Nikola Badger battery electric and fuel cell versions.

“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,” said General Motors Chairman and CEO Mary Barra. “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.”

Nikola expects to achieve $4 billion in savings on battery and powertrain costs over 10 years and another $1 billion in engineering and validation costs, according to a MarketWatch report. GM expects to receive more than $4 billion in benefits between the shares’ equity value, contract manufacturing of the Badger, supply contracts for batteries and fuel cells, and EV credits.

Nikola’s agreement extends General Motors’ utilization of its fuel cell technology to the Class 7/8 semi-truck market.

Fuel cells are set to take over the medium-heavy vehicle market in the near future with the new environmental rules and regulations that are phasing out diesel and fuel use.

General Motors’ Ultium battery technology intends to utilize silicon anodes and lithium metal anodes, which will improve vehicle range, affordability, and reduced dependence on rare and costly metals.

Wedbush analyst Dan Ives said the news is a big deal for Nikola. ”There have been many skeptics around Nikola and its founder Trevor Milton’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,” he added.

Nikola shares jumped 45% premarket on the news, while GM was up 7%.

Nikola first introduced the Badger on Feb. 10, 2020, and it will debut worldwide at the Nikola World 2020 event in Arizona to be held between December 3-5.

Badger production is expected to start in late 2022 and the company has opened pre-order reservation.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Leave a Reply

Your email address will not be published.

Recent Posts

The Top 3 Movie Marketing Campaigns

The Top 3 Movie Marketing Campaigns

The bigger the production house, the bigger the budget for cinema marketing campaigns. Often it is almost as big as half the movie budget.
1 day ago
The Top Activist Investors Fight For People and Profits

The Top Activist Investors Fight For People and Profits

In a democracy, people vote for change. Thus, investor activism can also be called shareholder democracy. An activist investor can be an individual or a group that buys the shares
2 days ago
The El Salvador Bitcoin City: Powered By a Volcano

The El Salvador Bitcoin City: Powered By a Volcano

Addressing the crowds at a promotional event for bitcoin, in the town of Mizata, Bukele assured his citizens that the Bitcoin city will have everything. “Residential areas, comme
3 days ago
Why Do CEOs Swear? Because They’re Intelligent That’s Why

Why Do CEOs Swear? Because They’re Intelligent That’s Why

A 2015 study found that highly intelligent people are better at coming up with curse words as they have a greater vocabulary and are not afraid to use it. Timothy Jay, professor em
3 days ago
Look Beneath The Surface For the Truth About Floating Solar Farms

Look Beneath The Surface For the Truth About Floating Solar Farms

As of 2021, India and China account for some of the biggest solar farms in the world. The two countries combined are home to six of the ten biggest floating solar farms in the worl
3 days ago
Best Retirement Plans For Entrepreneurs While Inflation Soars

Best Retirement Plans For Entrepreneurs While Inflation Soars

As of 2021, over 150 million US workers identified themselves as self-employed. This means that they are responsible for their own retirement plans. Employees of big firms tend to
4 days ago