General Motors is inking its second major partnership deal in less than a week. This time the automaker is announcing a $2 billion partnership with electric vehicle startup Nikola; a deal that will include GM producing the Nikola Badger hydrogen-electric pickup truck.
GM says the deal will give Nikola access to GM’s Ultium battery technology, hydrogen fuel-cell technology and testing process. The access to GM hardware will extend to manufacturing as well, with GM committing to building Nikola’s Badger pickup, which will be offered in hydrogen and battery-electric powertrains. The Badger is slated to enter production towards the end of 2022.
In exchange, GM will take $2 billion worth of Nikola’s recently-issued common stock. The shares will equate to about 11% of Nikola, giving GM a vested interest in the company’s success.
“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 Founder and Executive Chairman Trevor Milton said in a statement.
“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.”
While GM will be responsible for some of the components and the manufacturing of the Badger, Nikola will retain responsibility for selling it and retain the brand.
The two companies have also confirmed GM will assist Nikola beyond the Badger pickup, with plans for some of Nikola’s heavy-duty vehicles to transition to GM’s Ultium battery technology. The added scale and synergies are estimated to generate about $4 billion in benefit to GM. Nikola estimates around $4 billion in savings over the next 10 years thanks to the GM partnership.
Today’s announcement is a fast follow to last Thursday, when GM announced a strategic alliance with Honda Motor Company in North America. While that partnership does not include any equity exchange like this deal, it does center around sharing electric vehicle technology and further scaling GM’s Ultium battery technology.