Nikola, GM Announce Wide Ranging Partnership
By Mike Osenga09 September 2020
Nikola Corp. and General Motors Co. have announced a strategic partnership that begins with the Nikola Badger all-electric and hydrogen fuel cell pickup truck and is expected to drive cost reductions through Nikola’s programs, including the Badger, Nikola Tre, Nikola One, Nikola Two and NZT.
General Motors will be the exclusive supplier of fuel cells globally (outside of Europe) to Nikola for Class 7/8 trucks. General Motors will also engineer, homologate, validate, and manufacture the Nikola Badger pick-up truck battery electric and fuel cell versions.
The deal calls for General Motors to receive a $2 billion/11% equity stake in Nikola in exchange for certain in-kind contributions. In turn, Nikola anticipates saving over $4 billion in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs
General Motors said it expects to receive in excess of $4 billion of benefits between the equity value of the shares, contract manufacturing of the Badger, supply contracts for batteries and fuel cells, and EV credits retained over the life of the contract
Nikola will be responsible for the sales and marketing for the Badger and will retain the Nikola Badger brand. The Badger was
first announced on Feb. 10, 2020 and will reportedly make its public debut in December. Badger production is expected to start in late 2022 at a location to be announced.
Nikola will remain an independent company. The investment is subject to customary antitrust regulatory approval and closing conditions. The parties anticipate closing the transaction prior to Sept. 30, 2020.
As part of the agreement, Nikola will utilize General Motors’ Ultium battery system and Hydrotec fuel cell technology, a key commercialization milestone for General Motors, the company said.
The agreement with Nikola extends General Motors’ utilization of its fuel cell technology to the Class 7/8 semi-truck market and represents a high-volume commercialization of its Hydrotec fuel cell system and complements the company’s battery-electric propulsion. General Motors said it sees additional growth opportunities in multiple transportation, stationary and mobile-power end markets.
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.
Nikola Founder and Executive Chairman Trevor Milton said. “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.”
“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,” said General Motors Chairman and CEO Mary Barra. “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.”
General Motors said its battery development work is ongoing. Its Ultium battery technology roadmap includes silicon anodes and lithium metal anodes, which will the company said will improve vehicle range, affordability, and reduced dependence on rare and costly metals. It is already demonstrating automotive-grade durability and significantly higher energy density, GM said.