GM will no longer take an equity stake in Nikola or build its pickup truck
General Motors will no longer take an equity stake in Nikola Corp. or build its pickup truck, under a revised deal that still envisions GM as a key tech supplier for Nikola's planned line of electric and fuel cell heavy trucks.
Driving the news: The revised agreement Monday is smaller in scope than a draft partnership rolled out in September that had included a $2 billion stake in the startup and an agreement to build its Badger pickup.
- Under the nonbinding deal, the companies will work together to use GM's "Hydrotec" fuel-cell technology in Nikola's planned semitrucks.
- In addition, they will "discuss the potential for the utilization of GM’s versatile Ultium battery system" in the vehicles, the announcement states.
Why it matters: The deal's future has been uncertain since Nikola was hit with allegations that now-departed founder and executive chairman Trevor Milton had made misleading or inaccurate statements.
Where it stands: In addition to dropping plans for the equity stake, the slimmed-down deal no longer involves GM building the pickup, and Nikola said it will refund customer deposits it had taken for the vehicle.
- "[T]he Nikola Badger program was dependent on an OEM partnership," the announcement states, signaling that Nikola is not currently planning to proceed with the vehicle.
What they're saying: "The signing of GM as a partner is a positive but ultimately no ownership/equity stake in Nikola and the billions of R&D potentially now off the table is a major negative blow to the Nikola story," Wedbush Securities analyst Dan Ives said in a note.