January 17, 2021

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NEW YORK  — General Motors will not be taking a stake in the electric vehicle company Nikola, and the company said Monday that it was scuttling one of its marquee vehicles, an electric and hydrogen-powered pickup, after GM pulled technological support from the project.

Shares of Nikola plunged more than 26%.

Nikola on Monday released updated terms between the companies for a supply agreement related to GM’s fuel-cell system, replacing an agreement signed in September. That deal would have given GM an 11% stake in Nikola.

The early agreement would also have allowed Nikola to use GM’s new battery electric truck underpinnings for its electric and hydrogen-powered pickup called the Badger, and its fuel cell and battery technology as well. That is no longer part of the agreement, essentially gutting Nikola’s plans for the Badger.

Nikola said Monday that it will begin refunding deposits made by customers who wanted first dibs on that pickup.

“In a nutshell, 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,” said Wedbush analyst Dan Ives. “This went from a game changer deal for Nikola to a good supply partnership but nothing to write home about.”

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NEW YORK (AP) — General Motors will not be taking a stake in the electric vehicle company Nikola, and the company said Monday that it was scuttling one of its marquee vehicles, an electric and hydrogen-powered pickup, after GM pulled technological support from the project.

Shares of Nikola plunged 24%.

Nikola on Monday released updated terms between the companies for a supply agreement related to GM’s fuel-cell system, replacing an agreement signed in September. That deal would have given GM an 11% stake in Nikola.

The early agreement would also have allowed Nikola to use GM’s new battery electric truck underpinnings for its electric and hydrogen-powered pickup called the Badger, and its fuel cell and battery technology as well. That is no longer part of the agreement, essentially gutting Nikola’s plans for the Badger.

Nikola said Monday that it will begin refunding deposits made by customers who wanted first dibs on that pickup.

“In a nutshell, 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,” said Wedbush analyst Dan Ives. “This went from a game changer deal for Nikola to a good supply partnership but nothing to write home about.”

There were hints that the partnership was going sideways in late September as a deadline for an binding agreement approached. GM said then that negotiations about its $2 billion role were ongoing, sending shares of Nikola sliding.

That announcement came just days after Nikola founder and Chairman Trevor Milton resigned after Hindenburg Research, a company that’s betting Nikola stock will drop, accused Nikola of Fraud.

Hindenburg said Nikola’s success was an “intricate fraud,” including a video showing a truck rolling downhill to give the impression it was cruising on a highway, and stenciling the words “hydrogen electric” on the side of a vehicle that was actually powered by natural gas.

Nikola denies the allegations and called them misleading. The Securities and Exchange Commission and the Justice Department are reportedly investigating.

On Monday, GM spokesman Jim Cain said the revised agreement is more focused. He said the new memorandum of understanding will help Nikola produce its commercial trucks, and help GM commercialize its fuel cell technology.

Nikola said Monday that its work on heavy trucks will continue. GM will still be part of a global supply agreement that would integrate GM’s Hydrotec fuel-cell system into Nikola’s commercial semi-trucks.

“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,” said CEO Mark Russell.

Nikola is based in Phoenix.

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General Motors (GM) announced on Monday that it would not be buying into the electric vehicle company Nikola and it would be ending development of an electric and hydrogen powered vehicle.



a sign on the side of a building: GM pulls planned backing from electric vehicle company


© Getty Images
GM pulls planned backing from electric vehicle company

The two companies in September signed an agreement that would allow Nikola to use GM’s new electric truck underpinnings for its electric and hydrogen-powered pickup called the Badger in exchange for giving GM an 11 percent stake in the company.

In the updated terms for their agreement, this detail was no longer included, essentially ending plans for the project, the Associated Press reports.

Nikola said it would begin refunding customers who had made deposits for the vehicle. Shares for the Phoenix-based company dropped by 24 percent after the announcement.

“In a nutshell, 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,” said Dan Ives, an analyst for investment firm Wedbush. “This went from a game changer deal for Nikola to a good supply partnership but nothing to write home about.”

This news comes as GM has indicated it would be investing more into the electric vehicle industry, moving away from fossil fuels. The company last week shared that it was withdrawing from litigation challenging California’s new, stricter emissions standards, citing the new incoming administration under President-elect Joe Biden and its own plans to invest more in electric vehicles.

Early in November, GM announced that it had reached a breakthrough in battery technology, claiming its new electric batteries would soon rival the performance of diesel-fueled cars. The company claimed that not only would their cars hold twice as much energy, they would also be cheaper than the standard $30,000 that most electric cars are currently priced.

The company reportedly wants to surpass Tesla as the leading global electric vehicle manufacturer.

“We think the industry is transforming, and so we want to be at the leading edge of this,” said GM executive vice president Doug Parks.

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NEW YORK (AP) — General Motors will not be taking a stake in the electric vehicle company Nikola, and the company said Monday that it was scuttling one of its marquee vehicles, an electric and hydrogen-powered pickup, after GM pulled technological support from the project.

Shares of Nikola plunged 24%.

Nikola on Monday released updated terms between the companies for a supply agreement related to GM’s fuel-cell system, replacing an agreement signed in September. That deal would have given GM an 11% stake in Nikola.

The early agreement would also have allowed Nikola to use GM’s new battery electric truck underpinnings for its electric and hydrogen-powered pickup called the Badger, and its fuel cell and battery technology as well. That is no longer part of the agreement, essentially gutting Nikola’s plans for the Badger.

Nikola said Monday that it will begin refunding deposits made by customers who wanted first dibs on that pickup.

“In a nutshell, 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,” said Wedbush analyst Dan Ives. “This went from a game changer deal for Nikola to a good supply partnership but nothing to write home about.”

There were hints that the partnership was going sideways in late September as a deadline for an binding agreement approached. GM said then that negotiations about its $2 billion role were ongoing, sending shares of Nikola sliding.

That announcement came just days after Nikola founder and Chairman Trevor Milton resigned after Hindenburg Research, a company that’s betting Nikola stock will drop, accused Nikola of Fraud.

Hindenburg said Nikola’s success was an “intricate fraud,” including a video showing a truck rolling downhill to give the impression it was cruising on a highway, and stenciling the words “hydrogen electric” on the side of a vehicle that was actually powered by natural gas.

Nikola denies the allegations and called them misleading. The Securities and Exchange Commission and the Justice Department are reportedly investigating.

On Monday, GM spokesman Jim Cain said the revised agreement is more focused. He said the new memorandum of understanding will help Nikola produce its commercial trucks, and help GM commercialize its fuel cell technology.

Nikola said Monday that its work on heavy trucks will continue. GM will still be part of a global supply agreement that would integrate GM’s Hydrotec fuel-cell system into Nikola’s commercial semi-trucks.

“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,” said CEO Mark Russell.

Nikola is based in Phoenix.

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