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GM-Nikola Talks Drag On

“Dream” partnership on electric trucks faces legal probes, December deadline
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Will General Motors go through with its plan to acquire an 11% stake in electric-truck startup Nikola? Apparently not as originally envisioned.

Nikola Badger electric pickup  (Images: Nikola)

Under the expansive scheme outlined by the companies in September, GM would earn $2 billion in equity over five years by supplying Nikola with Ultium batteries, Hydrotec fuel cells, engineering support and production capacity.

High Hopes

GM would earn emission credits by producing a variety of Nikola battery- and fuel cell-powered trucks, including the Badger pickup and Tre highway tractor, to be sold by the startup.

The deal also would help GM commercialize the fuel cell systems it has been co-developing with Honda.

Badger production was to begin by the end of 2022. Nikola estimated the alliance would save it $5 billion in product development and production costs over 10 years.


But the proposed partnership was upended days later when short-seller Hindenburg Research claimed that Nikola founder Trevor Milton had deceived investors with a series of overstatements about its capabilities and progress.

The charges prompted Nikola’s stock price—already down 38% from a peak of nearly $80 per share immediately after the company went public in June 2019—to plunge more than 60% in two months to less than $19.

Nikola’s Tre highway truck

Milton vehemently denied the accusations. But he quickly stepped down, indicating he was doing it so as to avoid hindering the company’s “world-changing mission.”

It’s been slow-going since then.

Soldiering On

“We’re interested in doing the deal with GM, if we can get it done,” CEO Mark Russell told analysts earlier today.

But whether that is possible is unclear. The answer awaits the outcome of investigations by the U.S. Securities and Exchange Commission and Dept. of Justice. Those probes could drag on for months.

In the meantime, Nikola says it will press ahead with a “base plan” to launch the Badger and Tre models, eventually.

The company indicates it might tap an existing tech-sharing arrangement with Robert Bosch to help speed things along. But, at least for now, Nikola will go it alone on fuel cell powertrains development.

Bottom Line

The partnership GM and Nikola described in September seemed about as win-win as any deal could be.

“You couldn’t dream of a better partnership than this,” Milton gushed at the time. The big challenge now is moving the deal beyond dreamland.