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General Motors said Tuesday that it would take a $2 billion equity stake in Nikola Corporation, a start-up aiming to make electric and hydrogen-powered trucks that has become a favorite of investors.
G.M. said it would build pickup trucks for Nikola and provide battery pack technology in exchange for an 11 percent stake in Nikola. In a statement Nikola said it expects the partnership will save more than $4 billion in battery and powertrain costs over 10 years, while G.M. said it expects to receive more than $4 billion in benefits stemming from the equity value of its stake, and supplier and manufacturing contacts with Nikola.
“Our backgrounds are different but we share the goal of putting as many E.V.s in the hands of our customers as possible,” G.M.’s chief executive, Mary T. Barra, said in a conference call, referring to electric vehicles.
The truck will use modular battery packs that G.M. has designed and plans to produce in a new factory that is under construction in Ohio. G.M. did not say where it will assembly trucks for Nikola.
“This will allow Nikola to achieve things it could never do alone,” Nikola’s founder and executive chairman, Trevor Milton, said. “Being able to avoid building our own factory has saved Nikola billions of dollars.”
Nikola also intends to offer a version of the Badger truck powered by hydrogen fuel cells supplied by G.M. “This allows us to build the Badger on fuel cells that are fully validated,” Mr. Milton said.
Nikola has not sold any trucks yet but investors have snapped up the company’s shares, betting that it will be one of the winners in a rapid transition to electric vehicles. The stock market values the company at nearly $19 billion. On Tuesday its stock was up about 40 percent, to nearly $50. G.M. stock gained 7 percent to more than $32.
G.M. has been working on some two dozen electric cars and trucks of its own. Those vehicles will use the company’s “Ultium” battery packs. The company has also formed a partnership to provide battery packs to and develop electric vehicles with Honda Motor.
Nikola’s Badger truck may arrive in a crowded market. G.M., Ford Motor, Tesla and at least two other start-ups — Rivian and Lordstown Motors — are all working on electric pickup trucks.
Article source: https://www.nytimes.com/live/2020/09/08/business/stock-market-today-coronavirus