General Motors (GM) is ditching its equity stake in hydrogen and electric car and truck start-up Nikola, and will no longer build the Badger ute (pickup) under a new, pared down agreement between the two companies.
The news saw Nikola share values plummet by 26.92% on Monday (US time), closing at $US20.41 ($A27.73).
Under the new agreement, which as a memorandum of understanding is not set in stone, GM will supply its Hydrotec fuel-cell technology for Nikola’s planned class 7 and class 8 trucks which are aimed at the medium-haul and long-haul sectors.
Nikola says it expects to start testing its hydrogen fuel cell trucks by the end of 2021 with beta prototypes to go into production in 2022. The two companies will also explore the use of GM’s Ultium batteries for the fuel cell electric trucks.
“We are excited to take this important step with GM, which provides an opportunity to leverage the resources, strengths and talent of both companies,” said Mark Russell, CEO of Nikola, in a statement.
“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.
“We believe fuel-cells will become increasingly important to the semi-truck market, as they are more efficient than gas or diesel and are lightweight compared to batteries for long hauls.
“By working with GM, we are reinforcing our companies’ shared commitment to a zero-emission future,” said Russell.
The new agreement between Nikola and GM replaces September’s deal that would have seen the American auto giant build the Badger ute for the start-up in return for an 11% equity stake.
However, shortly after the deal was announced, claims of “intricate fraud” by Nikola including a video that falsely shows its Nikola One semi as a working, mobile vehicle, resulted in former CEO Trevor Milton stepping down from the company.
Having previously eclipsed the value of Ford in June on news that reservations would open for its Badger ute with shares approaching $US80 in value, the claims of fraud saw Nikola’s value topple.
GM’s new deal with Nikola, which has moved from that of partner to proprietor, is widely regarded as indicative of the auto giant’s loss of faith in the company.
Nikola said in a statement that it would refund order deposits to those that had ordered the Nikola Badger.
Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She specialises in writing about new technology and has been writing about electric vehicles for two years. She has a keen interest in the role that zero emissions transport has to play in sustainability and is co-organiser of the Northern Rivers Electric Vehicle Forum.