GM, Nikola Shares Pop on New Partnership Announcement
It’s the latest in a series of partnerships between Old Auto and Young, Electric Auto
Francis Scialabba
• less than 3 min read
Yesterday, hallowed Detroit automaker GM announced a $2 billion investment in Nikola, the sexy electric truck shop that went public in June via reverse merger.
The details: GM will develop and manufacture Nikola’s new models in exchange for an 11% stake in the company and a seat on the board. Picture Timon and Pumbaa guiding Simba, but instead of eating bugs they’re teaching him how to install fuel cells.
- GM stock popped almost 8% on the news; Nikola jumped nearly 41%.
- One problem to solve later: Nikola’s Badger truck, which GM will help Nikola produce by late 2022, could eventually compete with GM’s trucks.
Zoom out: This is yet another example of an established automaker moving into the EV world via supplying components to younger rivals. Ford struck a similar agreement with Rivian last year, and EV startup Fisker also plans to outsource components. There is one exception though, and it’s a big one—Nikola’s last name/rival Tesla is vertically integrated, meaning it hasn't needed to strike the manufacturing partnerships that've become the industry norm.
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