(Yahoo Finance) – Nikola (NKLA) won’t have General Motors (GM) as an investor, at least for right now.
The electric truck maker said on Monday it has revised the terms of a prior deal with GM, and that the auto giant won’t be taking a stake in Nikola. The two companies will not work together to produce Nikola’s pickup truck, the Badger.
On September 8, Nikola said it selected GM to be its manufacturing parter for its electric pickup truck, dubbed the Badger. The Badger was expected to use GM’s widely acclaimed Ultium battery technology. Additionally, Nikola was slated to hand over $2 billion in stock to GM and also tap its battery-making prowess to develop semi-trucks.
CEO of Italian-American CNH Industrial Hubertus Muhlhauser and CEO and founder of U.S. Nikola Trevor Milton attends a news conference held to presents its new full-electric and hydrogen fuel-cell battery trucks in partnership with U.S. Nikola, at an event in Turin, Italy, December 3, 2019. REUTERS/Massimo Pinca
CEO of Italian-American CNH Industrial Hubertus Muhlhauser and CEO and founder of U.S. Nikola Trevor Milton attends a news conference held to presents its new full-electric and hydrogen fuel-cell battery trucks in partnership with U.S. Nikola, at an event in Turin, Italy, December 3, 2019. REUTERS/Massimo Pinca
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But the highly publicized deal — which was slated to close this week — had been thrust into tumult. Under fire from an early September report from short-seller Hindenburg Research, which questioned Nikola’s technology and overall potential, founder Trevor Milton resigned as executive chairman on September 21. Mark Russell — who arrived at Nikola in 2019 after a stint as COO of Worthington Industries — took over as Nikola CEO soon after Milton’s exit.
“Absolutely,” Russell told Yahoo Finance Live when asked if he is prepared with a plan to move forward that doesn’t include GM. Now Russell will be put to that test.
Under the revised terms of the new non-binding agreement, GM will supply its Hydrotec fuel-cell system for Nikola’s commercial semi-trucks. Shares of Nikola popped 12% on the news, likely as the fuel-cell system aspect of the new deal will help Nikola get its semi truck to market quicker.
