- After GM pulled the plug on its deal with Nikola, the latter lost almost 25% of its share value.
- GM canceled the deal after news about alleged deception by Nikola surfaced on multiple reports, while the company founder Trevor Milton left the company not too long ago.
- However, GM has signed a smaller deal to supply hydrogen fuel cells to Nikola, while the Badger pickup truck is now officially canceled.
Just a few months after signing an agreement with EV startup Nikola, GM has now withdrawn from the partnership while also canceling plans to purchase a stake in Nikola. This news came as a big blow to Nikola’s shares as it saw a reduction of almost 25% after GM’s exit was announced.
However, it is said that GM will still supply hydrogen fuel cells to Nikola for future projects. The two companies have reportedly signed a new memorandum of understanding to accommodate this. The company is also beginning the process of issuing refunds to customers who placed deposits for the Badger pickup truck which is now canceled.
GM took a step back from the company after multiple reports alleged Nikola and its founder Trevor Milton of engaging in deception including the faking of a video showing the Badger truck driving in one of its early demo/marketing videos. Meanwhile, the company is also beginning the process of issuing refunds to customers who placed deposits for the truck.
Milton eventually left the company with pressure increasing from the investors regarding the future of Nikola. In the short span since the two companies signed the deal, it was reported that GM will help Nikola bring the Badger pickup truck to the market, and maybe even get a stake in the company.
However, it’s clear that the revelations about deception and the consequent pressure ultimately led GM to exit the deal. Though a smaller deal still exists between the two companies, GM’s departure has no doubt hurt Nikola’s credibility in the marketplace.
Here’s the joint statement issued by GM and Nikola:
“The agreement between Nikola and GM is subject to negotiation and execution of definitive documentation acceptable to both parties. The MOU does not include the previously contemplated GM equity stake in Nikola or the development of the Nikola Badger. As previously announced, the Nikola Badger program was dependent on an OEM partnership. Nikola will refund all previously submitted order deposits for the Nikola Badger.”