NEW YORK — General Motors might perhaps now not be taking a stake in the electric vehicle company Nikola, and the company stated Monday that it used to be scuttling surely one of its marquee autos, an electric and hydrogen-powered pickup, after GM pulled technological make stronger from the mission.
Shares of Nikola plunged 24%.
Nikola on Monday launched as a lot as this level phrases between the agencies for a supply agreement associated to GM’s gas-cell machine, changing an agreement signed in September. That deal would possess given GM an 11% stake in Nikola.
The early agreement would also possess allowed Nikola to make utilize of GM’s new battery electric truck underpinnings for its electric and hydrogen-powered pickup known as the Badger, and its gas cell and battery technology in addition. That isn’t any longer fraction of the agreement, in actuality gutting Nikola’s plans for the Badger.
Nikola stated Monday that this might birth refunding deposits made by possibilities who wanted first dibs on that pickup.
“In a nutshell, the signing of GM as a partner is a distinct but finally no ownership/fairness stake in Nikola and the billions of R&D doubtlessly now off the table is a first-rate unfavorable blow to the Nikola story,” stated Wedbush analyst Dan Ives. “This went from a game changer deal for Nikola to an real supply partnership but nothing to write residence about.”
There were hints that the partnership used to be going sideways in gradual September as a deadline for an binding agreement approached. GM stated then that negotiations about its $2 billion role were ongoing, sending shares of Nikola sliding.
That announcement came just days after Nikola founder and Chairman Trevor Milton resigned after Hindenburg Examine, a company that’s making a bet Nikola stock will drop, accused Nikola of Fraud.
Hindenburg stated Nikola’s success used to be an “intricate fraud,” along with a video showing a truck rolling downhill to present the influence it used to be cruising on a motorway, and stenciling the words “hydrogen electric” on the aspect of a vehicle that used to be surely powered by pure gas.
Nikola denies the allegations and known as them deceptive. The Securities and Exchange Rate and the Justice Division are reportedly investigating.
On Monday, GM spokesman Jim Cain stated the revised agreement is extra centered. He stated the brand new memorandum of working out will abet Nikola manufacture its industrial trucks, and abet GM commercialize its gas cell technology.
Nikola stated Monday that its work on heavy trucks will proceed. GM will aloof be fraction of a global supply agreement that might integrate GM’s Hydrotec gas-cell machine into Nikola’s industrial semi-trucks.
“Heavy trucks live our core enterprise and we’re 100% centered on hitting our pattern milestones to carry neat hydrogen and battery-electric industrial trucks to market,” stated CEO Mark Russell.
Nikola depends mostly in Phoenix.