By on November 30, 2020

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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14 Comments on “GM No Longer Building Nikola Electric Pickup, Nixes Equity Stake...”

  • avatar

    I never heard anybody explain what GM was getting out of this deal. It made no sense. GM was going to build “Nikola’s pickup truck.” It was going to use its own battery technology and its own production resources. Did GM really think that slapping a Nikola badge on the thing was going to gin up a lot of demand that wasn’t there before? Is the GM name in the EV category so tarnished that its management thought that pasting on the name of a dodgy upstart would have added any value?

    So now GM is just going to sell off-the-shelf bits to Nikola. Big deal. From what I’ve seen of Nikola so far, it will need very few of them.

    I really have to wonder about the competence of the people at GM who proposed this deal in the first place. It seems like some heads should be rolling there, but I guess GM is still Too Big To Fail.

  • avatar

    GM management really look like a bunch of suckers here. What’s next? They start answering calls about their vehicle warranties about to expire?

  • avatar
    SCE to AUX

    “GM still intends to supply some of the necessary hardware for Nikola’s commercial rigs”

    With little to no expected volume from Nikola, GM has reduced its exposure to zero.

    This olive branch from GM is a way for Nikola to save face for the few suckers willing to maintain their investments.

    Oh, to be a fly on the wall of that Zoom call between these two.

    Nikola was doomed from the moment they touted hydrogen FCV technology. They only detoured to BEV just to score some viable interim technology from existing players – sort of.

    I hope they call it game over by summertime. We don’t need another Faraday Future zombie startup.

  • avatar

    Is Nikola really exists to say – “F#, Tesla”?

    • 0 avatar

      “F#, Tesla”

      Tesla actually uses Python as its main programming language, though some of Musk’s Tweets have left people wondering if they’re going to switch to C/C++.

      • 0 avatar

        @inside: They are absolutely not using python – at least for autopilot. I know that for a fact. As far as I know, they use python for things like processing the fleet data and data test automation. Again, that’s first-hand knowledge. They are definitely using C/C++ and other languages on Autopilot. I’m using C/C++, verilog with opencl and opencv. Tesla is C++ with opencl and cuda.

        Python is so slow. It would never work for real time use.

        • 0 avatar

          Tesla also uses python for deep learning/training.

        • 0 avatar
          Art Vandelay

          I use Python to interact with vehicle systems and script effects, but that is on my attack platforms. I have never seen it used in any meaningful way on vehicle systems to include things like infotainment.

          • 0 avatar

            Musk (in twitter): ‘Our NN is initially in Python for rapid iteration, then converted to C++/C/raw metal driver code for speed (important!). Also, tons of C++/C engineers needed for vehicle control & entire rest of car. Educational background is irrelevant, but all must pass hardcore coding test.”

            He certainly never mentions F#.

          • 0 avatar

            I use Python to program $5 computers.

  • avatar
    Brett Woods

    Fan dance. The directors slip away with huge personal fortunes.

  • avatar

    I look forward to the lawsuits.

  • avatar

    I knew I’d seen that snout before (Nikola’s vaporware semi tractor).

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