GM to supply production capacity, tech to Nikola in multi-billion dollar deal

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General Motors and Nikola on Tuesday announced a comprehensive strategic partnership that will see GM provide Nikola with technology and services in return for $2 billion worth of newly issued shares, rivaling a similar, but smaller partnership between Ford and Rivian.

Under the deal, which is expected to close by September 30, GM will supply Nikola with batteries and fuel cells for the startup’s future products, which include the Badger pickup truck; One, Two and Tre semi-trailer trucks; and NZT utility task vehicle. GM will also provide engineering and validation services to Nikola, and also manufacturing capacity. The first vehicle GM will manufacture for Nikola will be the Badger.

The Badger is a battery-electric, full-size pickup truck that Nikola will offer with a hydrogen fuel cell range extender. According to the company, the truck will be good for 300 miles on battery-power alone and a further 300 miles when using the range extender, making it a potential alternative to Tesla’s Cybertruck, as well as some of GM’s own upcoming electric pickups.

Nikola Tre

Nikola Tre

Nikola previewed the Badger in a series of sketches in February, and will reveal it in the metal in early December. The pickup is available for pre-order reservation and is slated to start production in late 2022.

GM expects to receive benefits worth $4 billion via the shares in Nikola, as well as the contract manufacturing of the Badger, supply contracts for batteries and fuel cells, and EV credits retained over the life of the contract. Nikola meanwhile expects to save over $5 billion in battery, powertrain and engineering costs over 10 years.

“By joining together, we get access to (GM’s) validated parts for all of our programs, General Motors’ Ultium battery technology and a multi-billion dollar fuel cell program ready for production,” Nikola CEO and founder Trevor Milton said in a statement.

Trevor Milton

Trevor Milton

The first Nikola to enter production will be the Tre semi-trailer truck, starting in 2021. Like the Badger, it will be a battery-electric design with an available fuel cell range extender. Nikola has partnered with Italian truck manufacturer Iveco for production of the Tre at a site in Germany, and will rely on other suppliers for fuel cells that go into vehicles manufactured in Europe.

Nikola plans to establish a plant in Arizona for its other trucks, which is slated to come online around 2023. The Arizona plant will build Nikola’s larger One and Two electric semis, as well as the Tre for North America (the German site will supply Europe). Like the Tre, the One and Two will also be offered with fuel cell range extenders.

You might be wondering where Nikola expects its customers to purchase hydrogen to power the range extender on their trucks. The company plans to build its own network of hydrogen fueling stations, with solar farms used to provide the energy used to generate the hydrogen.

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