We’re ready to ‘go into the market alone if we have to’, without General Motors

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Nikola’s new CEO, Mark Russell, is set to go down the path without potential partner General Motors (GM), if that is the end of ongoing talks between the two by December 3.

“Absolutely,” Russell told Yahoo Finance Live when asked if he was ready with a plan to move forward that does not include GM.

On September 8, Nikola announced that it had chosen GM as a manufacturing partner for its electric pickup truck, dubbed Badger. The Badger is expected to use GM’s widely acclaimed Ultium battery technology. In addition, Nikola was to cede more than $ 2 billion in inventory to GM and harness its battery-making prowess to develop semi-trucks.

But the high-profile deal – which was due to close on September 30 – was engulfed in uproar. Under fire from an early September report from short seller Hindenburg Research that questioned Nikola’s technology and overall potential, founder Trevor Milton resigned as executive chairman on September 21. Russell – who arrived at Nikola in 2019 after a stint as COO of Worthington Industries – took over as CEO of Nikola soon after Milton left.

In this illustration is displayed on the screen of a smartphone the logo of the company Nikola Corporation, specializing in the design and manufacture of trucks running on hydrogen, is displayed on the screen of a smartphone in front of a blue background of global stock markets and global indices in Frankfurt, Germany on June 12, 2020. It is one of the global companies that develops and manufactures hydrogen fuel cell products in today's alternative energy market. (Illustration photo by Alexander Pohl / NurPhoto via Getty Images)
In this illustration is displayed on the screen of a smartphone the logo of the company Nikola Corporation, specializing in the design and manufacture of trucks running on hydrogen, is displayed on the screen of a smartphone in front of a blue background Global Stock Markets and Global Indices in Frankfurt, Germany on June 12, 2020. It is one of the global companies that develops and manufactures hydrogen fuel cell products in today’s alternative energy market. (Illustration photo by Alexander Pohl / NurPhoto via Getty Images)

Nikola and GM continue to say that discussions are ongoing.

“This [going at it alone] was our basic plan before discussions with the GM. We have a fuel cell program that we have been working on with Bosch for several years. We obviously have a battery program – we go into production with our own battery electric vehicles. This will be our basic plan. We would love to have access to GM’s Ultium battery, both of which have substantial technology and promise. But if we don’t, we’ll have a basic plan and we can go into the market on our own if we have to, ”explained Russell.

The autonomous action plan for Nikola probably means no Badger pickup truck and a clear focus on making Class 8 battery-powered and hydrogen-powered trucks. It could also mean a capital raise sometime in 2021, as pre-income Nikola burns money to expand his truck manufacturing capabilities.

Russell says of a possible capital increase: “We have been saying in our investor documents for quite some time – most of the year in fact – that we would do another capital increase that would involve a capital increase. . And that would be over the next 12-18 months. We would do this opportunistically depending on market conditions. So wait on that. This is going to be our plan. We plan to return to the market for an additional tranche of equity and we will do so when conditions are best for it.

Brian Sozzi is an editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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