Partnership talks between General Motors Co. and Nikola Corp. to build electric and fuel-cell trucks together are pushing ahead, GM President Mark Reuss told Bloomberg TV.
GM and Nikola have yet to finalize their partnership agreement after detailing it in early September. Days after that announcement, a short seller accused Nikola and its then-chairman, Trevor Hamilton, of deception about its technology and capabilities, causing Nikola’s stock price to plunge and leaving investors to think GM is asking for more out of the deal before signing off.
“Right now we are going forward,” Reuss said in a Bloomberg TV interview.
Under the agreement, Nikola would utilize GM’s new Ultium battery system and Hydrotec fuel-cell technology for its vehicles. GM would engineer and manufacture the Nikola Badger truck’s battery-electric and fuel-cell versions. In exchange, Nikola would give GM $2 billion in newly issued common stock and an 11% stake in its company.
Per the agreement between the two parties established on Sept. 3, Nikola would sell 47,698,545 shares of its common stock to GM Holdings. The shares were valued at $2 billion based on the average price per share of $41.93, according to a Sept. 8 Nikola filing with the Securities and Exchange Commission.
Nikola’s share price closed Wednesday at $22.24, up more than 7% for the day.
In a statement, Sam Abuelsamid, principal analyst for Guidehouse Insights, said the deal “basically comes down to settling on a suitable share price for the exchange. With Nikola shares currently trading at just over half of what the original agree price was, GM clearly wants to reprice at a lower level.
“Both companies have an incentive to make the deal happen. GM wants to utilize more of its production capacity for fuel cells and Ultium truck platforms. Nikola needs a supply partner for fuel cells and the Badger.”
One of the more “exciting” aspects to the discussions is “they are taking what I believe is the best fuel cell in the world — with our fuel cell that is made in our joint venture with Honda right here in Michigan — and taking that fuel cell and looking at deploying it in the heavy-duty transport market with the large trucks — the Class 7 and 8s — and also in the light-duty Badger truck,” Reuss said.
The Badger will have a different powertrain from the Ultium battery-pack system used in its new GMC Hummer EV that the automaker unveiled on Tuesday, Reuss said.
“We won’t sell and market that truck. That is what Nikola is doing,” he said. “The big difference there is that truck will have a fuel cell. It’s still a fuel-cell electric truck but quite different from what we are offering on our Ultium packs on the pure electric Hummer.”
The two companies have until Dec. 3 to finalize their deal. In a statement GM said: “Our transaction with Nikola has not closed. We are in discussions with current Nikola management and will provide further updates when appropriate or required.”
khall@detroitnews.com
Twitter:@bykaleahall