Nikola Corporation and General Motors have signed a revamped memorandum of understanding that could lead to GM supplying hydrogen fuel cell technology for the Phoenix-based startup’s proposed semi-trucks.
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However, GM will not take a stake in the company, which sent the shares tumbling.
|GM||GENERAL MOTORS COMPANY||49.97||-1.56||-3.03%|
The non-binding agreement supersedes a previous one announced in September that included GM taking a $2 billion equity stake in Nikola and the incorporation of GM’s technology into a consumer pickup called the Badger. Nikola is now shelving the Badger program and refunding all deposits taken for the vehicle to date.
“This supply agreement recognizes our leading fuel cell technology expertise and development,” Doug Parks, GM executive vice president of Global Product Development, Purchasing and Supply Chain, said in a press release. “Providing our Hydrotec fuel cell systems to the heavy-duty class of commercial vehicles is an important part of our growth strategy and reinforces our commitment toward an all-electric, zero-emissions future.”
GM will engineer its Hydrotec system to be integrated into Nikola’s Class 7/8 semi prototype, which is scheduled to begin testing by the end of 2021. If the vehicle moves toward production, GM said the arrangement will be cost plus, with Nikola paying upfront for the capital investment for the manufacturing capacity for the fuel cell powertrain.
“We are excited to take this important step with GM, which provides an opportunity to leverage the resources, strengths and talent of both companies,” said Mark Russell, the chief executive officer of Nikola.
The September agreement came under scrutiny after short-seller Hindenberg Research released a report accusing Nikola of fraud in the way it presented its own technology to investors, which led to the resignation of founder Trevor Milton as executive chairman of the company and the launch of investigations into the company by the Securities and Exchange Commission, Department of Justice and New York County District Attorney.