GM scales back partnership with electric truck startup Nikola
General Motors Co. scaled back a partnership with clean-energy trucking startup Nikola Corp., scrapping a tentative deal to jointly build an electric pickup truck and replacing it with a non-binding deal to supply hydrogen-fuel technology.
Under terms of a non-binding memorandum of understanding announced Monday, GM will allow Nikola to use its hydrogen fuel-cell technology in planned semi trucks. The agreement doesn’t include GM taking an equity stake in Nikola, unlike a deal proposed in September, and also drops plans for GM to manufacture a battery-powered pickup for Nikola called the Badger.
Shares of Nikola initially spiked on word of an agreement in premarket trading, but then fell as low as 6.2% to $26.20.
The deal comes ahead of a Dec. 3 deadline and ends months of speculation over GM’s commitment to the Phoenix-based company after a short seller report cast doubts on Nikola’s ability to deliver on promises and its transparency with investors. The allegations of deception hammered the once high-flying stock, prompted the resignation of founder Trevor Milton and forced GM to reconsider terms of the initial agreement.