GM to take stake in Nikola’s e-truck

The old-school auto giant will help the Arizona-based startup with battery and fuel cell technologies initially for the Nikola Badger pickup truck

NEW YORK • General Motors Co (GM) drove further into the world of electric vehicles (EVs) on Tuesday, announcing a manufacturing partnership with electric truck company Nikola Corp in the latest cost-sharing venture.

As more automakers join forces to work on ambitious advances, the old-school auto giant will help the Arizona-based start-up with battery and fuel cell technologies initially for the Nikola Badger pickup truck, and later for its larger commercial vehicles, the companies said in a joint statement.

In exchange, GM will receive an 11% stake and a seat on the board of Nikola, which plans to start producing the Badger by the end of 2022.

The announcement produced an immediate windfall for investors in Nikola, worth US$2 billion (RM8.4 billion), whose shares surged by around 40%. GM shares also advanced solidly on a down day for Wall Street.

GM and other US automakers are spending billions to develop new EVs at the same time the industry is also investing heavily in autonomous technologies.

GM will provide “in-kind” services to the e-truck start-up and will “engineer, homologate, validate and manufacturer the Nikola Badger battery electric and fuel cell versions,” the companies said.

Nikola founder and executive chairman Trevor Milton said on Tuesday the partnership would save his company US$4 billion in batteries alone.

GM has already “spent billions of dollars developing their EV power train…their batteries and their fuel cells,” Milton said on a conference call with analysts.

“Rather than letting their asset sit there and try to build it organically, one of the things they’ve been able to do is jumpstart this growth internally at GM with Nikola.”

Milton launched Nikola in 2015, and the company went public in June, announcing plans to build hydrogen fuelling stations, in additional to zero-emission vehicles.

The company, which has drawn comparisons to e-car company Tesla Inc, has broken ground on a manufacturing facility in Arizona, in addition to a facility still under construction in Germany.

With the GM partnership, Nikola “immediately gets decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering and investor confidence”, Milton said in a news release.

“Most importantly, GM has a vested interest to see Nikola succeed.”

GM CEO Mary Barra said the partnership showed the potential of the Detroit giant’s technologies to be used in environmentally progressive autos.

“We are growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability,” Barra said.

And using the company’s technology on Nikola’s “heavy-duty class of commercial vehicles is another important step in fulfilling our vision of a zero-emissions future”, she said.

The Nikola announcement comes on the heels of GM’s announcement last week that it is deepening its collaboration with Japanese automaker Honda Motor Co Ltd to share vehicle platforms and development costs.

GM’s US rival Ford has teamed up with German giant Volkswagen AG to jointly develop electric and self-driving vehicles, and a pending merger between Fiat Chrysler Automobiles NV and Peugeot SA also aims to hold costs down.

Analysts expect more of these partnerships and joint ventures. — AFP