Nikola Corporation, a Phoenix, Arizona-based electronic vehicle startup, and General Motors Co. announced September 8 that the two had come to form a strategic partnership. Additionally, Nikola Corp. said its Badger electric truck would be designed, engineered, and manufactured by GM and use GM batteries and fuel cells.
In exchange for 11% ownership of Nikola, a $2 billion equity stake, and the right to nominate a director, General Motors agreed to manufacture the truck and give Nikola access to its parts and components.
In a statement, GM estimated it would receive in excess of $4 billion in benefits, including the value of the shares, the contract to manufacture the Badger, supply contracts for batteries and fuel cells, and electric vehicle credits retained for the life of the contract. In addition, the auto giant will become Nikola’s sole, exclusive supplier for Nikola’s Class 7/8 trucks.
Nikola anticipates saving over $4 billion in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs.
GM will be subject to a staged lock-up provision beginning in one year and ending in June 2025.
Nikola will retain the Badger brand and remain responsible for marketing and sales of the truck, slated to be available in two versions: one traditional electric truck, and one that runs on hydrogen fuel cells. According to GM, the location where the Badger is to be manufactured will be announced at a later date. According to Nikola, the Badger will be formally revealed in December and begin production in 2022.
In a statement, GM CEO Mary Barra said the partnership with Nikola would be a prime opportunity to deploy GM’s new proprietary battery and hydrogen 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,” she said. “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.”
“Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn’t dream of a better partnership than this,” said Nikola’s founder and CEO, Trevor Milton. Milton also lauded GM’s Ultium battery technology and Hydrotech fuel cell systems, and noted that General Motors now has “a vested interest to see Nikola succeed.”
The deal is expected to close before September 30, pending typical regulatory appeal.