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GM backs out of stake in Nikola, cancels plan for 'Badger' electric pickup

By Jamie L. LaReau, Detroit Free Press on

Published in Business News

In this pending arrangement, plans for the Badger are canceled. "Nikola is going to focus on its core business and therefore, no Badger," said Nikola spokeswoman Colleen Robar.

The Badger program was dependent on a partnership with an automaker, so Nikola said it will refund all previously submitted order deposits for the pickup.

"Heavy trucks remain our core business and we are 100% focused on hitting our development milestones to bring clean hydrogen and battery-electric commercial trucks to market," Mark Russell, CEO of Nikola, said in a statement. "We believe fuel-cells will become increasingly important to the semi-truck market, as they are more efficient than gas or diesel and are lightweight compared to batteries for long hauls. By working with GM, we are reinforcing our companies' shared commitment to a zero-emission future."

Nikola said it will begin testing production-engineered prototypes of its hydrogen fuel-cell powered trucks by the end of next year, with testing for the beta prototypes to begin in the first half of 2022.

But Nikola and GM said they will discuss possibly using GM's Ultium battery system in Nikola's commercial trucks. Ultium is GM's proprietary battery system that it will use to power the 30 electric passenger vehicles it plans to bring to market by 2025.

Under the potential agreement, GM would engineer its Hydrotec fuel cell system to the specifications the companies agree to, GM said in a news release. The companies will discuss the "appropriate scope of services that GM would provide for the integration of the fuel cell system into Nikola's vehicles," GM's release said.

 

GM expects the potential arrangement would be "cost plus, and that Nikola would pay upfront for the capital investment for the capacity."

In a research note Monday, analyst Dan Ives of Wedbush wrote: "The headline from today's announcement is that surprisingly GM will not be taking an equity/ownership stake in Nikola as previously planned which will be viewed as a clear negative to the Street hoping this piece of the original deal stayed on course."

In pre-market trading, Nikola stock was down 16.36% to $27.93. GM stock was down 0.24% to $45.06.

GM's Hydrotec fuel cell system will be engineered at GM's technical facilities in Pontiac and Warren and manufactured at its Brownstown Charter Township battery assembly plant.

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