Nikola and General Motors Establish a New Strategic Partnership for Electric Trucks
On Tuesday morning before the opening bell, General Motors announced that it is receiving a 11% ownership ($2 billion equity stake) in electric truck maker Nikola. GM plans to "engineer, validate, homologate and build" the electric pickup truck the Badger, and will begin production of the marquee vehicle by the end of 2022.
Additionally, The agreement with Nikola extends General Motors’ utilization of its fuel cell technology to the Class 7/8 semi-truck market. Fuel cells will become more popular in semi-trucks because it’s more efficient than gas or diesel. General Motors sees additional growth opportunities in multiple transportation, stationary and mobile-power end markets.
In the press release, General Motors Chairman and CEO Mary Barra stated: “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.”
This strategic partnership will help Nikola reduce the cost of production and save over $4 billion in "battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs."
Nikola Founder and CEO Trevor Milton stated: “ 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.”
Nikola’s shares are trading higher but ~37% at the time of this writing while shares of GM are trading up nearly 9%.
Investors continue to show great interest in electric vehicles due to Tesla’s success and incredible growth in production. What are your thoughts on the EV space? Let us know in the comments below!
Disclosure: At the time of publication, I have no positions in any of the securities mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.