General Motors and Nikola Corporation formed a strategic partnership to produce battery electric and fuel cell electric trucks, starting with the Nikola Badger pickup. The companies anticipate that working together on scaling up EV production will lower battery and fuel cell costs while increasing profitability.
Under the new agreement, GM receives a $2 billion equity stake in electric truck startup Nikola in exchange for certain in-kind contributions, subject to regulatory approval. Nikola will remain an independent company, the partners said.
Nikola plans to utilize GM’s Ultium battery system and Hydrotec fuel cell technology. GM agreed to “engineer, validate, homologate, and build the Nikola Badger for both the battery electric vehicle and fuel cell electric vehicle variants as part of the in-kind services,” according to the automaker. The Badger pickup truck should enter production by year-end 2022, the partners say.
“The agreement with Nikola extends General Motors’ utilization of its fuel cell technology to the Class 7/8 semi-truck market and represents a high-volume commercialization of its leading Hydrotec fuel cell system and complements the company’s battery-electric propulsion,” the partners noted. “Fuel cells will become increasingly important to the semi-truck market because they are more efficient than gas or diesel.”
This strategic partnership carries cost reductions for Nikola’s vehicles, which include Nikola Tre, Nikola One, Nikola Two, and NZT in addition to the Badger, GM and Nikola said. Competition in the electric truck market remains high. Nikola indicated earlier this year that they had at least 14,000 pre-orders lined up. Anheuser-Busch InBev previously contracted 800 trucks for their fleet in the United States.
Rival Tesla, despite delaying their Semi truck delivery until 2021, has orders for the all-electric truck from fleet owners that include Albertsons, Walmart, Anheuser-Busch, Pepsi, J.B. Hunt Transport, DHL, and UPS. During an earnings call earlier this year, Tesla co-founder and CEO Elon Musk cited the need for improved battery production capacity as part of the reason.
GM’s vested interest in Nikola sent the electric truck startup’s shares up 41%, Alan Ohnsman reported in Forbes. “The move boosts the odds Nikola, which won’t generate meaningful revenue for at least two years, can get its heavy-duty electric trucks into production (more or less) on schedule and take Elon Musk’s Tesla Semi in the race to commercialize zero-emission trucking,” he wrote.