General Motors Co. took a $2-billion equity stake in startup Nikola Corp. and agreed to manufacture a new electric-pickup model.
General Motors Co. took a $2-billion equity stake in startup Nikola Corp. and agreed to manufacture a new electric-pickup model in a deal that diversified the Detroit-based automaker’s alternate-fuel-vehicle strategy.
to generate any meaningful revenue — an immediate boost of legitimacy and the industrial might of an established player while also benefiting GM. The well-established automaker expects to receive more than $4 billion in perks from the deal. In addition to the equity value of the shares, it will be paid to manufacture the Badger, supply batteries and begin commercializing fuel-cell technology for the semi-truck industry.
GM does risk fostering a new rival in the way that early investments in Tesla Inc. by Daimler AG and Toyota Motor Corp. helped that electric-car company grow into a fierce competitor. But GM Chief Executive Officer Mary Barra sees lots of room for growth in the budding market for EVs. She noted that GM gained access through Nikola to the Class 7 and 8 freight truck business.
“This news is a huge shot in the arm for Nikola,” Dan Ives, an analyst at Wedbush Securities with a “neutral” rating on the company’s stock, said in a research note Tuesday. “There have been many skeptics around Nikola and its founder Trevor Milton’s ambitions over the coming years, which now get thrown out the window with stalwart GM making a major strategic bet on Nikola for the next decade on the EV and fuel-cell front.
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