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GM takes a $2 billion stake in Nikola to make electric pickup trucks

By Jamie L. LaReau, Detroit Free Press on

Published in Automotive News

DETROIT - General Motors is taking a stake in electric vehicle maker Nikola Corp. in a deal that will eventually deliver $4 billion in benefits to GM as it commercializes its EV technology.

The partnership will ultimately reduce costs for each company as GM pursues its all-electric vehicle strategy.

In the deal, announced Tuesday, Nikola will exchange $2 billion in newly issued stock for services and access to GM's parts and components. Nikola has yet to make any of the heavy duty hydrogen fuel cell trucks it is developing. GM also has the right to nominate one board director at Nikola.

GM will "engineer, homologate, validate and manufacture the Nikola Badger battery electric and fuel cell versions," the companies said in a statement. The Badger is a heavy-duty fuel-cell electric pickup expected to go into production by the end of 2022.

"This strategic partnership with Nikola, an industry leading disrupter, continues the broader deployment of General Motors' all-new Ultium battery and Hydrotec fuel cell systems," said GM CEO Mary Barra. "We are growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability."

Barra said using GM's electrified technology in the heavy-duty class of commercial vehicles is an important step in fulfilling its vision of an all-electric future.

 

GM on the move

This news comes five days after GM said it had a deal with Honda to share vehicle platforms and technology in North America starting next year. The two have signed a nonbinding memorandum of understanding to establish a North American automotive alliance.

GM has said it envisions an "all electric" future though it currently sells just one EV in the United States: the Chevrolet Bolt, built in its Orion Assembly plant in Lake Orion. But GM is spending $3 billion a year to develop more than 20 electric models that it will launch by 2023. Those include the Cadillac Lyriq SUV and a GMC Hummer pickup, both to debut late next year. GM is retooling its Detroit-Hamtramck Plant to assemble the electric cars.

"In terms of the big picture, GM is on the move, putting together strategic alliances - last week with Honda and now with Nikola - to build a company that can better meet the demands of today while investing in the future," said Michelle Krebs, executive analyst for Autotrader. "GM has invested heavily in its new battery technology, which can proliferate through Honda and Nikola. High volumes promise to bring down the costs, one of the keys in gaining wider consumer acceptance."

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