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GM, electric-truck maker Nikola enter into alliance - The Detroit News

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Detroit — General Motors Co. is again leveraging its electric technologies to form an alliance with electric vehicle startup Nikola Corp., the two companies said Tuesday.

Nikola will utilize GM’s new Ultium battery system and Hydrotec fuel cell technology for its vehicles. GM will engineer, approve, validate and manufacture the Nikola Badger truck's battery electric and fuel cell versions. Nikola will give GM $2 billion in newly issued common stock and an 11% stake in its company for the in-kind services and access to GM's parts and components.

GM will be subject to a staged lock-up provision, an agreement that it cannot sell its shares, beginning in one year and ending in June 2025. The announcement comes as GM pushes forward with its electric vehicle programs while looking for ways to use its technologies beyond its own portfolio and to share the cost of developing the expensive programs.

“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 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.”

GM and Honda Motor Co. last week signed a memorandum of understanding establishing a strategic alliance in North America for product development and purchasing. The automakers have an ongoing partnership on electrification. Earlier this year, the two agreed to develop two new electric vehicles for Honda based on GM's electric platform and with its Ultium batteries.

Phoenix-based Nikola, founded in 2015, is a battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems and hydrogen station infrastructure designer and manufacturer. News of the partnership sent Nikola stocks surging more than 30% before market open Tuesday. 

“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,” Nikola Founder and Executive Chairman Trevor Milton said in a statement. “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."

The agreement with Nikola extends General Motors’ utilization of its fuel cell technology to the Class 7/8 semi-truck market and represents a commercialization of its Hydrotec fuel cell system. GM said it sees additional growth opportunities in multiple transportation, stationary and mobile-power end markets for its fuel cells. 

GM expects $4 billion of benefits to come from the partnership 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.

While the partnership with Nikola starts with its Badger truck, it will provide cost reductions for the Nikola Tre, Nikola One, Nikola Two and NZT. The automaker expects to save more than $4 billion in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs with the partnership.

Nikola is responsible for the sales and marketing of the Badger and will retain the Nikola Badger brand. The Badger was first announced on Feb. 10, 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. 

This is a developing story. Check back for more. 

khall@detroitnews.com

Twitter: @bykaleahall

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