GM said it will receive an 11% stake in Nikola, as well as the right to nominate a director to the board, as it unveiled a joint venture with the Phoenix-based startup founded by Trevor Milton. The deal will see GM building the Nikola Badger, a fully-electric and hydrogen fuel cell electric pickup truck, as well as becoming the exclusive supplier of fuel cells around the world -- outside of Europe -- for Nikola's Class 7/8 trucks.
"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 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."
GM shares were marked 9% higher in early afternoon trading following the JV news release to change hands at $32.67 each, while Nikola shares surged 44.5% to $51.37 each, a move that more than triple's the start-up's year-to-date gain, valuing it at just over $19.5 billion - around half of the current value of its new equity partner.
"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," said Nikola's Milton. "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."