General Motors has abandoned plans to buy a stake in troubled electric truck startup Nikola. GM will no longer help engineer and manufacture Nikola’s battery-electric and hydrogen fuel cell vehicles, including the Badger pickup truck.
GM transitions from partner to customer
On Monday, the two companies announced a much-reduced agreement to retain the fuel cell partnership. Under the terms of the MOU, Nikola and GM will „work together to integrate GM’s HydroTech fuel cell technology into Nikola’s Class 7 and Class 8 zero-emission semi-trucks in the medium- and long-haul trucking segments,” Nikola announced.
„All previous contracts involving stock components have been terminated,” a GM spokeswoman said in an email.
Essentially, GM is moving from partner to customer, reflecting the auto giant’s less confidence in Nikola, said iSeeCars managing analyst Karl Brauer. „Nicola reflects the somewhat frenetic demand for electric and hybrid vehicle evolution, and the potential dangers if a company overstates claims about how quickly that evolution is happening,” said Breuer.
The future of Nikola’s Badger pickup truck is in doubt. The company first announced the fuel cell truck in February 2020, saying it would have a range of 600 miles, produce more than 900 horsepower, and go from 0 to 60 mph in 2.9 seconds.
But the truck’s development was completely „dependent” on a partnership with an automaker. Without that partnership, Badger is officially in limbo. Nicola said it would return „all order deposits previously submitted to Nicola Badger”.
Nikola, which went public earlier this year through a „reverse merger” with a specialized acquisition firm, saw its share price fall as much as 26.5 percent on news of the deal with GM. Founded in 2015, Nicola has carved out a unique niche in the bustling EV space by claiming to build zero-emission big rigs using hydrogen fuel cell technology.
While several companies like Tesla, Daimler, Freightliner and other established players and startups are working on all-electric trucks, Nikola is one of the few to pursue hydrogen-powered big rigs. Hydrogen-powered vehicles haven’t really caught on in the passenger car space because there’s been very little investment in the necessary infrastructure. Only a few hydrogen filling stations exist to date.
Meanwhile, GM is centering a multibillion-dollar „all-electric future” that includes spending $2.2 billion to develop its first „fully-dedicated” electric vehicle assembly plant and its modular battery-electric platform. Altium. Last week, the automaker said it would increase its investment in electrification to $27 billion by 2025.