General Motors is teaming up with Nikola Motors, the Phoenix-based truck startup in a $2 billion deal that the two new partners say will save them billions while helping bring new zero-emissions vehicle technology to market at a lower cost.
As part of the deal, GM plans to produce the Nikola Badger truck while providing both batteries and fuel-cell systems for both that pickup and the Class 7 and Class 8 semi trucks Nikola is developing. GM is receiving $2 billion from the startup, giving it an 11% stake, for “in-kind services.” The deal sent Nikola shares, traded as NKLA on the NASDAQ, soaring in early Tuesday trading.
“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,” said Trevor Milton, Nikola founder and executive chairman. “You couldn’t dream of a better partnership than this.”
(GM, Honda strengthen existing partnership.)
Founded in 2014, Nikola has yet to produce its first commercial product but has laid out plans to enter several segments of the truck market. That includes semis like the Nikola One, as well as the aforementioned Badger pickup. The various models will be offered in different zero-emissions configurations, allowing customers to choose between hydrogen and batter-electric propulsion, depending upon their needs.
Nikola is already setting up a heavy-truck factory near Phoenix for products like the Nikola One, but it had yet to lock down plans for the Badger, CEO Milton looking at the challenges and costs involved with setting up such a facility. With the new alliance, GM will handle production of the pickup which it will built alongside its own models, such as the GMC Hummer set to go into production in 2021.
During a media conference call, GM CEO Mary Barra declined to reveal where the trucks will be assembled but it is widely expected the automaker will use its Detroit-Hamtramck Assembly Plant, a facility currently undergoing a $1 billion makeover to handle electrified vehicles.
The new partnership means that Nikola will abandon the electrified platform it had been developing on its own for the Badger, instead sharing GM’s EV truck architecture. And Nikola will now use GM’s new Ultium battery technology for its various products, as well as the Hydrotec hydrogen fuel-cell technology that GM has been developing as part of a separate partnership with Honda.
The Badger will continue to use its own unique design, both inside and out, Milton stressed, along with unique Nikola technology in areas such as infotainment. Nonetheless, the new approach should help it save at least $4 billion “on battery costs alone,” he added.
For her part, General Motors CEO Mary Barra said she believes the partnership “provides substantial benefits for GM as well.”
(Nikola Motors begins taking reservations for Badger hydrogen/electric pickup.)
The automaker, she said during Tuesday morning’s call, echoing her now familiar mantra, “is on a path to an all-electric future,” and by partnering with a company like Nikola – as well as with Honda – allows GM to “build scale to lower battery and fuel-cell costs.”
The largest of the Detroit automakers plans to have “20 or more” all-electric vehicles in production by 2023 and is setting up a new factory near Lordstown, Ohio to produce a new generation of lithium-ion batteries. Developed jointly With South Korea’s LG Chem, the goal is to bring them to market at $100 per kilowatt hour, down from the $145 per kWh GM paid for the batteries in its Chevrolet Bolt. Longer term, said Barra, the automaker says it can get “below that,” especially by finding new markets for the Ultium batteries that can boost economies of scale.
During the call, Milton noted that the launch of the Badger pickup will be pushed back a year, to 2021. Several factors appear to have influenced that decision, including not only the shift to a GM platform but also delays caused by the coronavirus pandemic. The Nikola CEO noted the truck will be slightly larger than current, traditionally powered pickups, such as the Chevrolet Silverado 1500. It is expected to offer as much as 900 horsepower and, in its hydrogen/battery configuration, deliver as much as 600 miles of range.
Trevor also revealed that the startup initially hopes to be selling “tens of thousands” of Badgers annually, with longer-term goals of pushing even higher.
Nikola already revealed that it will offer several versions of the truck, including an all-electric drivetrain as well as a battery-hydrogen model.
One of the challenges Nikola faces with its focus on fuel-cells is the lack of a refueling infrastructure. The startup has promised to set up a network of its own hydrogen stations to support its products, especially its semis – which are set to go into production within the next “12 months,” said Milton.
The tie-up with Nikola is the latest in a series of alliances GM has launched in recent years. It began working with Honda several years ago on fuel-cell technology that the Japanese automaker will use in products like future versions of its Clarion hydrogen car. For its part, GM has targeted stationary applications for the technology. But Barra said Tuesday that it will be “evaluating the appropriate fuel-cell entries for General Motors going forward.”
(Nikola Motors announces plans ZEV pickup — with a combination hydrogen and battery power.)
Since announcing their initial partnership, GM and Honda have said they will work together on battery and autonomous vehicle technologies and, most recently, revealed that they will pair up on the production of new vehicles, as well.
2 responses to “GM Forges $2B Deal With Nikola to Build Trucks, Develop New Electric and Fuel-Cell Technology”
Look at — https://hindenburgresearch.com/nikola/
Interesting, Jim, though clearly shows an ax to grind. I hope to address some of these questions during an interview to come with Nikola CEO Trevor Milton.
PS: Speaking of the Hindenburg, you do know the fire was NOT the result of problems with the hydrogen it used to get off the ground, right?