Collaborative efforts are pushing the sustainable transportation market forward, and the newest collaboration is sure to accelerate the production of one company’s new cars.
Nikola Motors (NKLA) has announced a strategic partnership with General Motors (GM), in which GM will gain 11% ownership over the electric vehicle (EV) company, and begin building the Nikola Badger. Nikola will also use GM’s Ultium battery system along with its Hydrotec fuel cell technology, both of which will help put GM on the EV map.
The move is set to save Nikola over $5 billion USD in battery, powertrain, engineering, and validation costs over the course of the next decade.
Man, Trevor Milton sure knows how to get a good deal! Let's examine the details of Nikola's new contract with GM.
GM agrees to "buy" 11% of Nikola at a price of $2B, but the shares are issued in-kind, a prepayment for services by GM (the shares are already up 10%), not cash. pic.twitter.com/mAgJUGOxMK
— Nafnlaus 🇺🇦 🇮🇸 (@enn_nafnlaus) September 8, 2020
The Nikola Badger, a 900-horsepower electric truck, will be the first vehicle released by the infant EV company. Following the announcement, Nikola’s shares rose 40%, an impressive feat for a company with no vehicles on the road yet.
“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. You couldn’t dream of a better partnership than this,” said Nikola Founder and Executive Chairman Trevor Milton, in a statement.
“By joining together, we get access to their validated parts for all of our programs, General Motors’ Ultium battery technology and a multi-billion dollar fuel cell program ready for production. Nikola immediately gets decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering and investor confidence. Most importantly, General Motors has a vested interest to see Nikola succeed. We made three promises to our stakeholders and have now fulfilled two out of three promises ahead of schedule. What an exciting announcement,” added Milton.
While Nikola plans to share the electric with the world in December, production is not set to happen until 2022. In that time, competitor Tesla is set to unveil its Cybertruck, as well as new versions of Models S, 3, X, and Y.
Still, Nikola has already started earning preorders on its vehicles, including an order for 2,500 electric waste trucks which was placed in August. Alongside the momentum it has already gained on its own, teaming up with GM is sure to launch the company into the market with a bang.
