GM No Longer Building Nikola Electric Pickup, Nixes Equity Stake

Matt Posky
by Matt Posky
gm no longer building nikola electric pickup nixes equity stake

On Monday, General Motors and Nikola Corp announced a revamped agreement that eliminates an equity stake in the startup for the Detroit automaker and nixed any plan for manufacturing Nikola’s electric pickup truck. This makes the keystone of the revised contract their collaborative work on fuel-cell development, represents a major setback in their partnership, and makes GM management look like rubes for having announced a sizable commitment that had to be walked back after a short seller claimed Nikola was fraudulently representing itself.

Despite having much to gain by torpedoing the EV startup’s curiously high share price, the associated Hindenburg report raised serious questions about exactly how much progress Nikola had made. The short seller effectively accused the company of fraud, something Nikola denied. Though subpoenas from the Securities and Exchange Commission and Department of Justice still began arriving at its offices in late September. Founder and former executive chairman Trevor Milton stepped down around this period. At the time, the company said it was cooperating with the investigations “and will continue to cooperate, with these and any other regulatory or governmental requests.”

According to separate announcements, the duo currently has a non-binding memorandum of understanding that needs to be negotiated ahead of any definitive deal. But utilizing General Motors’ facilities to manufacture the planned Badger electric pickup in exchange for an 11-percent stake in Nikola and $700 million appears out of the question — for now, anyway.

Though, if they aren’t building it soon, there’s little point. The Badger was intentionally being plotted to intercept Tesla’s fast-approaching Cybertruck and to combat the all-electric offerings planned by the Ford Motor Company. The Blue Oval is currently in the midst of electrifying the F-Series and threw a sizable amount of money at Rivian so it could use its skateboard platform to manufacture EVs for the Ford and Lincoln brands. While that deal also seems to have soured during the early stages of the pandemic, the Detroit automaker has since clarified that it will use Rivian’s hardware to manufacture an EV for Ford but not Lincoln.

The news definitely took a sizable bite out of Nikola’s share price, but the company has seen worse and is already showing signs that it might rally as investors learned GM still intends to supply some of the necessary hardware for Nikola’s commercial rigs. However, it’s slightly curious to see the legacy automaker supplying the startup with fuel-cell systems and its Ultium battery tech when the whole point of spending money on Nikola was to gain access to its purportedly cutting-edge technologies for alternative forms of propulsion and energy storage. Nikola also has partnerships with Bosch and CNH Industrial to supply it find solutions to its upcoming hydrogen and battery-powered products.

Frankly, we still don’t see what the startup is bringing to the table beyond a lot of promises and some relatively slick designs. But Nikola has large aspirations encompassing more than just truck production. It still wants to find a company it can partner with to establish a national hydrogen-fueling network necessary for FCEVs. As things currently stand, hydrogen-powered vehicles cannot stray more than a few hundred miles from their coastal hub in the United States and a strip of stations situated in Central Europe.

[Image: Nikola]

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2 of 14 comments
  • VoGhost ICE is so dangerous.
  • Akear Back as early as 2014 Ford was building some pretty decent vehicles. The Ford Fusion was getting good reviews and selling around 300,000 annually. The Mark MKZ was also the top selling US luxury car at the time in sales. My Ford Fusion is approaching the 200,000 mile mark, while current Fords blow gaskets at 40,000 miles.
  • Kjhkjlhkjhkljh kljhjkhjklhkjh yes ; required with non-federal legal penalties for deliberate violation
  • 28-Cars-Later "Honda and Acura haven’t yet released an EV in the United States"Ok..."The 2024 ZDX rides on GM’s Ultium Platform and will feature Google built-in services. "Waht?
  • Theflyersfan I was just at the Mazda dealer getting one of the free scheduled maintenances taken care of and saw a couple of these on the lot (inventory...I know!!! No Mazda3s or MX-5s, but had some CX-5s and CX-50s). They are even nicer in person - the paint especially stands out. Plus the terracotta interior treatment isn't something done by Honda, Toyota, or Nissan so you can get something different. The slight price hike is worth it and it's worth it just to have something that isn't white, black, or a million shades of gray. Or get the Soul Red. You can never go wrong with that color. I just with the terracotta interior was offered with that.