General Motors claims $2-billion stake in EV automaker Nikola
Expanding upon its charge into an all-electric future, General Motors has announced its backing of EV automaker Nikola. GM receives a $2-billion equity stake—11 percent ownership of Nikola—in exchange for access to the General’s Ultium and Hydrotec technologies and manufacturing prowess. The news follows last week’s reveal of GM’s “strategic alliance” with Honda, which will bring to market several new all-electric models on a shared architecture.
The GM-Nikola partnership begins with the latter’s Badger pickup and will continue as the startup’s model lineup expands into heavy-duty big-rigs. (A side-by-side UTV is also in the works, presumably one that you can tow and charge with your Badger pickup.) Nikola claims that the collaboration will save it in excess of $4 billion in battery and drivetrain development costs over the next decade, plus an additional $1 billion in overall engineering and validation costs. GM will handle the more expensive details of bringing Nikola’s designs to regulators for final approval, with GM also providing the engineering and manufacturing resources; this frees Nikola up to focus on the core product design.
The deal also sets GM up as Nikola’s exclusive supplier of hydrogen fuel cell components, notably the battery, for heavy-duty Class 7 and Class 8 heavy-duty trucks—the typical big-rig. Meanwhile, this agreement will help GM recoup development costs offset the incredible investment necessary for its electric Ultium and hydrogen fuel cell Hydrotec powertrain platforms.
Ideally, these types of deals will reduce the cost for consumers down the pipeline. With the immense cost of re-tooling an entire portfolio toward electric drivelines GM’s strategic relationships with other automakers should also help secure supplier relationships for these in-house alternative fuel solutions.
In the case of GM and Honda’s announcement concerning a new memorandum of understanding that establishes the framework of their strategic partnership, the two automakers effectively expanded a relationship that began in earnest around 2013. Since then, Honda is working to utilize GM’s Ultium batteries before expanding to the wholesale co-development of two new EV models.
Despite GM’s substantial investment, Nikola remains an independently operated and publicly traded company. With the means of production now secured, Nikola plans to reveal the Badger pickup during “Nikola World 2020” this December 3–5, 2020, with production at this juncture slated for late 2022.
