Iveco Group has quietly announced a demerger of sorts with the at times scandal ridden US zero emission start up Nikola . Iveco issued a press release on the 9th May that announced the Turin based company would assume full ownership of the joint venture it has with Nikola in Europe, adding that ‘they are excited to enter a new phase of their partnership’.
Iveco invested $250 million US in Nikola in 2019, but the scandal ridden US start up was battling sever headwinds with its founder Trevor Milton being charged by the US securities and investment authority with making false statements about progress with its hydrogen fuel cell trucks, which saw another investor, General Motors, pull out of a deal it had negotiated with Nikola.
For all of that Iveco claims that in the four years it has been involved with Nikola all milestones have been met so far and that the two companies have leveraged their respective expertise to deploy zero-emission heavy-duty trucks in North America and Europe.
In the statement Iveco said that the two companies had worked jointly at a steady pace, despite Covid-19 and supply chain challenges, and have achieved the outcomes of the previous phase, launching Battery Electric Vehicles (BEV) and Fuel Cell Electric Vehicles (FCEV) for regional and long haulage.
“Each company is now eager to sharpen its own focus on heavy-duty transport. Iveco Group will concentrate on Europe for the further development and commercialisation of its own battery electric and fuel cell electric trucks, which includes rolling out its financing business model GATE, and Nikola will focus its operations in North America, with an integrated approach to its customers, offering BEV, FCEV and hydrogen infrastructure via its HYLA brand, ” the statement said.
The new deal will see Iveco Group assume full ownership of the joint venture based at Ulm in Germany., and Iveco will be licensed to freely access and continue developing vehicle control software for the jointly developed BEV and FCEV.
Nikola will be granted the IVECO S-Way technology license for North America and related component supply from Iveco Group, and will gain joint ownership of the intellectual property of Generation 1 eAxles, technology developed together with Iveco Group’s powertrain brand, FPT Industrial.
Iveco Group says it will cover the capital outlay related to this new phase of collaboration through its available liquidity, acquiring the above-named items partially in cash (USD 35 million) and partially in Nikola shares (20 million of shares).
Despite the negative cash impact generated, Iveco says it forecasts to absorb it with cash flow generation, which it says will not change its cash flow target for 2023.
“Iveco will also retain a meaningful amount of Nikola shares and Iveco and Nikola will continue to work towards the same ultimate goal to lead the energy transition to the future of mobility,” the statement said.