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General Motors has abandoned its plan to acquire a stake in the struggling electric truck startup Nikola. GM will also no longer help design and manufacture Nikola’s battery and hydrogen fuel cell electric vehicles, including the Badger pickup truck.
It won’t be a total shock to anyone who has followed Nikola over the past few months. Less than a week after GM announced plans to acquire an 11% stake in the buzzing company, short-selling firm Hindenburg Research released an explosive report accusing Nikola of fraud in presenting its technology to electric vehicle. Nikola founder Trevor Milton stepped down as chairman of the board on September 21 following the report.
On Monday, the two companies announced a deeply cut deal that maintains the partnership with fuel cells. Under the terms of the MoU, Nikola and GM “will work together to integrate GM’s Hydrotec fuel cell technology into Nikola’s Class 7 and 8 zero-emission semi-trucks for the medium and long-haul truck industries.” courier, ”Nikola announced.
“The previous agreements, which included a stock component, have all been terminated,” a GM spokesperson said in an email.
Essentially, GM is moving from partner to customer, reflecting the auto giant’s reduced confidence in Nikola, said Karl Brauer, executive analyst at iSeeCars. “Nikola reflects the somewhat unrestrained demand for the evolution of electric and hybrid vehicles, and the potential pitfalls when a company exaggerates its claims about the speed of this evolution,” said Brauer.
The future of Nikola’s Badger van looks uncertain. The company first announced the fuel cell truck in February 2020, saying it would have a range of 600 miles, generate over 900 horsepower, and go from 0 to 60 miles per hour in 2.9 seconds.
But the development of the truck was totally “dependent” on a partnership with an automobile manufacturer. Without this partnership, the Badger is officially in limbo. Nikola said he would refund “all previously submitted order deposits for the Nikola Badger.”
Nikola, which went public through a “reverse merger” with a special acquisition company earlier this year, saw its share price drop 26.5% on news of the GM deal. Founded in 2015, Nikola has gained a unique position in the bustling electric vehicle space by claiming that it will manufacture large zero emission platforms using hydrogen fuel cell technology.
While a number of companies such as Tesla, Daimler, Freightliner and other established players and startups are working on all-electric trucks, Nikola was one of the few who sought out large hydrogen platforms. Hydrogen vehicles have never really taken their place in the passenger car space, as there has been very little investment in the necessary infrastructure. Only a handful of hydrogen filling stations exist to date.
Meanwhile, GM is in the midst of a multibillion-dollar pivot to an “all-electric future” that includes spending $ 2.2 billion to renovate its first “fully dedicated” electric vehicle assembly plant. and the development of its modular battery-electric platform, Ultium. Last week, the automaker said it was increasing its investment in electrification to $ 27 billion through 2025.
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