GM Gets $2 Billion From Nikola To Manufacture Electric Trucks

DETROIT, MI —General Motors and Nikola Corporation have formed an alliance in which the Nikola Badger will be engineered and manufactured by GM, the companies announced Tuesday.

Nikola will use GM's Ultium battery and Hydrotec fuel cell technology for its vehicles in exchange for $2 billion in common stock and 11 percent ownership in Nikola, according to a news release.

“Nikola is one of the most innovative companies in the world," Nikola Founder and Executive Chairman Trevor Milton said in a statement. "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.”

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. General Motors will be subject to a staged lock-up provision beginning in one year and ending in June 2025. 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,” General Motors Chairman and CEO Mary Barra said in a statement. “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.”

Tuesday's announcement comes shortly after General Motors and Honda announced they signed an agreement establishing a North American automotive alliance. The agreement includes a range of vehicles to be sold under each company's brands, as well as cooperation in purchasing, research and development, according to a news release.

The companies will collaborate on a variety of segments in North America, intending to share common vehicle platforms, including both electrified and internal combustion propulsion systems. Co-development planning discussions will begin immediately, with engineering work beginning in early 2021.

Related: GM, Honda Agree To Develop Future Products In North America

In the newest agreement, Nikola will be responsible for the sales and marketing for the Badger and will retain the Nikola Badger brand, the companies said. The Badger was first announced on Feb. 10, 2020, and will make its public debut Dec. 3-5, at Nikola World 2020 in Arizona. Badger production is expected to start in late 2022 at a location to be announced at a later date.

The parties anticipate closing the transaction prior to Sept. 30, 2020.