General Motors announced a strategic partnership with Nikola, an electric truck startup. Through the deal, General Motors gets a $2 billion equity stake (11% ownership) in the startup and will produce Nikola's Badger pick-up truck. Badger, which is anticipated to go into production in 2022, will make use of General Motors' Ultium battery system and Hydrotec fuel cell technology. Additionally, the partnership stipulates that General Motors will exclusively supply fuel cells for Nikola's upcoming class 7/8 trucks.
After the news surfaced, shares of both companies surged (via Tech Crunch). In pre-market trading, Nikola shares gained 45% and General Motors shares increased by 11%. In addition to the financial stake, General Motors will also reserve the right to nominate one director on Nikola's board in exchange for its services. Mary Barra, General Motors CEO, remarked that this collaboration would help the firm in deploying its battery and 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. 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."
By offloading manufacturing duties to General Motors, one of the world's largest carmakers, this deal makes it possible for Nikola to hit the market faster. This would see the startup's investors see return quicker and with possibly less risk.