Business is booming.

Nikola shares surge 45% after General Motors takes 11% stake in electric truck maker

2


Nikola Motor Company Badger pickup truck

Source: Nikola Motor Company

Shares of Nikola surged Tuesday after General Motors announced that it’s taking an 11% stake in the electric truck maker and will  produce its marquee hydrogen fuel cell electric pickup truck the Badger by the end of 2022.

Nikola’s shares jumped by about 45% in premarket trading while GM jumped by almost 9%. 

GM is getting a $2 billion stake in Nikola and the right to nominate one board member in exchange for in-kind services. GM will also supply Nikola’s fuel cells globally, except Europe, for its class 7/8 truck. Phoenix-based Nikola specializes in building zero-emission semi trucks using battery or hydrogen fuel cell technology, but it recently introduced its Badger pickup truck for consumers.

“When we look at the opportunity to continue to leverage our technology — the Ultium battery platform system as well as the Hydrotec fuel cell technology — this is a wonderful validation of our technology, and then bringing our engineering and manufacturing expertise to the table,” GM CEO Mary Barra said in an interview on CNBC’s “Squawk Box.”

Barra emphasized the potential benefits for GM, which has seen pressure from Wall Street to spin off its electric vehicle business, extend beyond the Badger pickup truck to include Nikola’s semi trucks, too “So this is a huge growth opportunity for us,” she said.

Appearing alongside Barra on “Squawk Box,” Nikola founder and Executive Chairman Trevor Milton said the partnership gives Nikola more than just a manufacturer. Nikola will also have access to GM’s validated parts as well as its Ultium battery technology and a multibillion dollar fuel cell program.

“GM was very unique to us because they brought a lot more than just building the Badger,” Milton said. “It’s a perfect relationship. They’re one of the purchasers, manufacturers, engineering houses in the entire planet.”

In a statement, Milton said GM gives Nikola “decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering and investor confidence. Most importantly, General Motors has a vested interest to see Nikola succeed.”

Nikola began trading June 4 after a reverse merger with VectoIQ, which is a publicly-traded special purpose acquisition company headed by former vice chairman of GM Stephen Girsky. The stock has taken off since its IPO despite the fact that Nikola, which was founded in 2015, doesn’t expect to generate revenue until 2021, and shows the dispensation investors are willing to give to companies that promise vehicles of the future.

CEO Trevor Milton had previously said the company would need to partner with an established manufacturer to build its Badger pickup.

Fuel cell technology combines hydrogen stored in a tank with oxygen from the air to produce electricity, with water vapor as the by-product. It’s been around for decades and while there are machines such as fork lifts that use the technology, it has yet to become mainstream due to cost, among other things.

Nikola plans to roll out the Nikola Tre class 8 battery electric vehicle in 2021, followed by Nikola Two class 8 fuel cell electric semi in 2023. Class 8 vehicles are typically the heaviest of heavy duty semi trucks. 

CNBC’s Kevin Stankiewicz contributed to this article. 



Source link

Comments are closed.