GM takes US$2B stake in Nikola and partners on pickup model

Nikola Badger Electric Pickup to Be Made by GM, Ultium Batteries on Deck

The American auto giant will provide "in-kind" services to the electric truck startup and will "engineer, homologate, validate and manufacturer the Nikola Badger battery electric and fuel cell versions", the companies said in a joint press release. Additionally, Nikola will hand over $2 billion in stock to GM - giving the automaker an 11% stake in the company.

Nikola shares leaped more than 32% to $46.95 in trading before Tuesday's opening bell. "Most importantly, General Motors has a vested interest to see Nikola succeed".

The deal leans on General Motors' deep bench, validating Nikola's vehicles as a true production grade products ready for the mass market with a full manufacturing system behind them. "You couldn't dream of a better partnership than this". Like the Tre, the One and Two will also be offered with fuel cell range extenders.

Nikola founder and chairman Trevor Milton said: "Nikola immediately gets decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering and investor confidence". The Badger isn't expected to be produced until 2022, and the company is now working on the construction of a production facility in Coolidge, Arizona. With the new alliance, GM will handle production of the pickup which it will built alongside its own models, such as the GMC Hummer set to go into production in 2021.

The partnership announcement also doesn't discuss the reason GM has considered scaling up commercial fuel-cell vehicles several times before and opted against it. Nikola plans to establish its own hydrogen fueling network, and with this partnership it might allow the company to focus more on that critical support piece.

Added GM Chairman and CEO Mary Barra, "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". GM also will supply batteries for other Nikola vehicles including heavy trucks.

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For Nikola, the partnership with GM is a vindication of its efforts to gain credibility as it moves toward production of its first vehicles.

Phoenix-based Nikola specializes in building zero-emission semi-trucks using battery or hydrogen fuel cell technology. GM will help with the development of the trucks. On Thursday GM said it would join with Japanese automaker Honda to share the costs of building vehicles powered by batteries and internal combustion engines.

In that same year, GM announced plans to launch at least 20 electric models by 2023.

Barra said on a conference call that GM has "platform that others can use that's going to give us scale and help us drive efficiency".

This partnership isn't the only fuel cell agreement that GM is engaged in.

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