General Motors and Nikola deal still in discussion
General Motors and Nikola haven’t finalized a deal that would see GM supply the startup with batteries and hydrogen fuel cells for the Badger pickup truck and a line of fuel-cell semi trucks, Reuters reported Tuesday.
The deal was supposed to be finalized by Sept. 30, but both companies confirmed in statements to Reuters that discussions were still ongoing.
“Our transaction with Nikola has not closed,” a GM spokesperson said. “We are continuing our discussions with Nikola and will provide further updates when appropriate or required.”
A statement from Nikola echoed GM’s, but a spokesperson would not comment when asked if the terms of the deal were being renegotiated, Reuters reported.
Announced Sept. 8, the deal included plans for GM to take an 11% stake in Nikola—then worth about $2 billion—with payments of up to $700 million for building the Nikola Badger pickup.
The Badger is a battery-electric full-size pickup that Nikola plans to offer with a fuel-cell range extender. Under the terms of the deal, GM would supply a platform for the Badger, and manufacture the truck at one of its factories.
Nikola first showed sketches of the Badger to troll Tesla CEO Elon Musk after the Cybertruck was unveiled in November 2019. Nikola confirmed plans to sell the Badger in February, but doesn’t plan to reveal it in the metal until December. The company is already taking reservations, and previously said it planned to start production in 2022.
GM expects the deal—which also includes supplying fuel cells for Nikola semi trucks—to provide $4 billion in benefits from Nikola shares, supply contracts, and EV credits. Nikola, meanwhile, expects to save over $5 billion in engineering costs over 10 years.
Two days after the deal was announced, short-seller Hindenburg Research released a report saying it believed Nikola is a “fraud,” claiming CEO Trevor Milton had falsely claimed to have proprietary technology.
The allegations prompted Department of Justice and Securities and Exchange Commission probes, and Milton stepped down on Sept. 21.