SMM: according to reports, on Sept. 8, General Motors announced that it will take an 11% stake in electric truck maker Nikola and will produce its hydrogen fuel cell electric pickup Badger by 2022. Nikola shares soared on the news, up about 45 per cent in pre-market trading, while GM shares rose nearly 9 per cent.
GM will receive a $2 billion stake in Nikola and has the right to nominate a board member. GM will also supply fuel cells for Nikola's Class 7 and Class 8 heavy trucks in other parts of the world except Europe. Phoenix-based Nikola specializes in zero-emission semi-trailers powered by batteries or hydrogen fuel, but recently launched Badger pickups to consumers.
GM CEO Mary Bora said, "partnering with Nikola is an excellent opportunity to put our Ultium battery platform systems and Hydrotec fuel cell technology into practice and bring our engineering and manufacturing expertise to the table."
Bora also highlighted the potential benefits of divesting the electric car business, saying GM has felt pressure from Wall Street to spin off its electric vehicle business and is now expanding from Badger pick-up trucks to Nikola semi-trailers. "this is a huge growth opportunity for us."
Trevor Milton, founder and executive chairman of Nikola, said the partnership will bring the company not only a manufacturer, but also GM-proven components and Ultium battery technology, and will be able to participate in a multibillion-dollar fuel cell program. GM is very unique to us because it not only helps us produce Badger pickups, but is also one of our purchasers, manufacturers and engineering companies. This is a perfect partnership. "
GM has provided Nikola with decades of experience in supplier and manufacturing, proven and tested electric vehicle propulsion systems and world-class engineering strength, and helped increase investor confidence, Milto said in a statement. More importantly, the success of Nikola is in line with GM's vested interests.
Shares began trading on June 4 after Nikola went public through a reverse merger with blank cheque company VectoIQ. Nikola, which was founded in 2015, is not expected to make a profit until 2021, but its share price soared after IPO, a sign of investor confidence in electric car start-ups and a desire to bet on the next Tesla.
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