In a move that has taken many by surprise, General Motors has inked a deal with prominent EV start-up Nikola, to leverage the auto giant’s electric technologies to gain more credibility in a field that has been dominated by shiny new start-ups that have attracted investors betting on next-generation transport.
GM’s announcement that it formed a 10-year alliance with Nikola to engineer and build the electric-vehicle startup’s Badger pickup truck underscores GMs commitment to an electric future, company insiders say.
The move signals the Detroit automaker’s capability in the electric and fuel-cell space that will allow it to aggressively compete with the likes of Tesla , which sells more electric vehicles than any other automaker.
Badger production is expected to start in late 2022 at a GM plant to be announced at a later date.
Shares of Nikola surged nearly 41 per cent on the news as GM shares climbed 8 per cent for the day. News of the alliance hit Tesla shares with a one-two punch, tumbling 21 per cent on the first day of trading since its effort to join the S&P 500 index was snubbed.
“One of the challenges that Tesla’s had, because Elon (Musk) doesn’t play well with others, they end up having to do a lot of work in-house … and Nikola is smart enough to recognize that others have the resources and the manufacturing expertise to do a lot of this stuff and they’re taking advantage of that,” said Sam Abuelsamid, a key research analyst for GuideHouse Insights.
“For GM, just being able to find customers for the electrification products that they’re developing … gives them a market for their products. That helps reduce their costs for their own branded car.”
GM is pressing ahead with its electric vehicle programs and is looking to use the technologies outside of its own portfolio to share the cost of developing the expensive programs. GM, which last week announced an expanded partnership with Honda , isn’t alone in forming .