GM and Nikola agree to massively scaled back deal
GM only plans to supply its hydrogen fuel cell technology. No Badger pickup or EV tech are included.
General Motors and Nikola announced a watered-down memorandum of understanding for a new partnership after months of discussions Monday, but the details remain foggy. With the new agreement, GM said it will supply its Hydrotec fuel cell systems for Nikola's upcoming fuel cell semi trucks . The question remains: Why does Nikola need GM's tech if it supposedly already developed proprietary systems?
I digress because what's not included in this MOU is even more interesting. The big news is GM decided not to build the Nikola Badger. We previously covered the vehicle's hyped-up birth and not-so-surprising demise: Without GM to build and engineer the truck, Nikola called it quits.
So there's no pickup truck in this deal. What else is missing? Battery and electric motor technology. Without GM's OK to build the Badger, Nikola will not receive access to the US automaker's Ultium battery and e-motor technology. The Badger promised a combination of a hydrogen and electric powertrain to produce 906 horsepower and 980 pound-feet of torque while delivering 600 miles of range. This goes back to the ultimate question, though. If Nikola already had its own systems developed, or under development, why reach out to GM? The two left the door open for Nikola to potentially gain access to GM's EV technology in the future, but for now, it's off the table.
GM also abstained from any equity investment in Nikola in this newly organized MOU, which is a safer bet after Nikola's rocky performances on Wall Street as of late. Shares are down 21% ahead of the market's opening at the time of writing.
As for GM's hydrogen tech, it'll find a home in Nikola's forthcoming Class 7 and Class 8 vehicles. Beta testing for these prototypes aren't expected to start until 2022, however. Nikola said it built its first Tre prototype -- its rebadged Iveco semi for Europe -- at the start of this month. The Tre doesn't use any fuel cell systems. Instead it runs on an undisclosed battery electric powertrain Nikola promises will deliver 248 miles of range, 644 horsepower and 1,327 pound-feet of torque. Like the first deal, GM will only supply its hydrogen system for countries outside Europe. Bosch remains Nikola's European supplier, the company confirmed to Roadshow.
GM and Nikola returned to the negotiating table following allegations of fraud at Nikola. A bombshell report alleged the company essentially worked to con partners into working with it until it had a product worth showing them. Since then, its chairman and face of the company, Trevor Milton, stepped down. The US Securities and Exchange Committee and the Department of Justice also issued subpoenas amid the allegations, though there's been no word of a formal investigation.
