GM takes $2B stake in Nikola, will produce Tesla rival’s electric truck

General Motors has taken an 11 percent stake in electric-vehicle maker Nikola, through a multibillion-dollar partnership with the Tesla rival announced Tuesday.

Under the deal, GM will get $2 billion in Nikola stock to engineer and manufacture the all-electric Badger pickup truck that the Phoenix-based startup first unveiled in February. Nikola will also get access to GM’s Ultium batteries and Hydrotec fuel cells, which it will use in the electric semi trucks it is developing.

“Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn’t dream of a better partnership than this,” Trevor Milton, Nikola’s founder and executive chairman, said in a statement.

The news sent Nikola’s stock price surging 28.5 percent in premarket trading to $45.69 as of 8:35 a.m., while GM shares were recently up 6.3 percent at $31.91. Tesla shares, meanwhile, had plunged 15.6 percent to $353.00 by 8:36 a.m.

The deal puts some meat on the bones for Nikola, a fledgling automaker that went public in June with a handful of vehicle concepts and essentially no revenue.

It also puts the company on the “competitive [electric vehicle] radar” of Tesla and CEO Elon Musk by giving Nikola an established partner with “massive infrastructure,” according to Wedbush Securities analyst Daniel Ives. Tesla makes its own cars at factories in the US and China but delivered just 367,500 vehicles last year while GM delivered nearly 2.9 million.

“There have been many skeptics around Nikola and its founder Trevor Milton’s ambitions over the coming years, which now get thrown out the window with stalwart GM making a major strategic bet on Nikola for the next decade,” Ives said in a note.

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GM and Nikola touted the partnership as mutually beneficial. Nikola will save more than $4 billion over 10 years in “battery and powertrain costs,” plus more than $1 billion in engineering and validation and expenses, while GM expects to reap a more than $4 billion benefit between its equity stake, contract deals and electric-vehicle credits.

“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,” GM CEO Mary Barra said in a statement.

But Nikola doesn’t expect to start producing the Badger pickup until late 2022 — though it’s planning a “public debut” for the truck in December.

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