Gm Agreement With Nikola

Electric truck maker Nikola is still in talks with General Motors to enter into an alliance in the coming weeks, but it has supply contracts with Bosch and battery maker Romeo Power for its large futuristic facilities in the absence of a partnership with the automaker. “We are pleased to take this important step with GM, which is an opportunity to leverage the resources, strengths and talents of both companies,” said Mark Russell, Nikola`s Chief Executive Officer. “Heavyweights remain our core business and we are 100% focused on achieving our development miles to bring clean hydrogen and battery electric utility vehicles to market. We believe that fuel cells are increasingly important to the semi-truck market because they are more efficient than gas or diesel and are lightweight compared to long-distance batteries. By working with GM, we are strengthening our companies` shared commitment to an emissions-free future. The new agreement, a non-binding Memorandum of Understanding that does not expire until the end of 2021, is the subject of negotiations and a final agreement, Nikola and GM said in separate statements. PHOENIX, November 30, 2020 /PRNewswire/ — Nikola Corporation (NASDAQ: NKLA) today announced the signing of a non-binding letter of intent (“MOU”) with General Motors for a comprehensive supply agreement to integrate GM`s Hydrotec fuel cell system into Nikolas` commercial semi-trucks. This transaction replaces and replaces the transaction announced on September 8, 2020. As part of the revised agreement, GM still intends to supply fuel cell technology to Nikola, but it intends to take an 11% stake in the Phoenix-based start-up in exchange for the provision of engineering work and other services. “The proposed agreement, which would give GM a stake in the shares and Nikola in exchange for various in-kind contributions, is not yet finalized, but discussions are continuing,” CEO Mark Russell said Monday in a quarterly statement. For now, Nikola is advancing plans to get batteries for Romeo Power tre-trucks in Los Angeles and fuel cells for hydrogen-powered Nikola Two trucks, which he developed with key partner Bosch. “Our basic plan is to produce a fuel cell that we developed in collaboration with Bosch for several years and that was specially designed for use in a heavy truck.” As part of the agreement, Nikola and GM will work together to integrate GM`s Hydrotec fuel cell technology into Nikolas for Class 7 and 8 emission-free vehicles for medium- and long-haul trucks. As previously announced, Nikola expects prototype hydrogen fuel cells to be tested by the end of 2021 and that testing for beta prototypes is expected to begin in the first half of 2022.

In addition, Nikola and GM will discuss the potential for the use of GM`s versatile Ultium battery system in Class 7 and 8 Nikola vehicles. The initial agreement reinforced Nikola`s status as one of the many high-flying green start-ups that attract Wall Street`s attention. GM`s loans to its engineering and manufacturing know-how and the awarding of a place on Nikola`s board of directors as part of the now-scrapped commitment were seen as confirmation of Nikola`s business model and growth prospects. If Nikola can implement his plans sometime next year, even without GM`s help, the company could be one of the first beneficiaries of a change in the United States.