General Motors and Nikola Corp on Monday announced a modified agreement on a fuel-cell partnership that removes an equity stake in the startup for the automaker as well as plans for building Nikola’s electric pickup truck.
In September, the two companies announced a deal under which GM would provide batteries, a chassis architecture, fuel cell systems, and a plant for building Nikola’s proposed Badger electric pickup in return for an 11% stake and $700 million.
The new agreement, a non-binding memorandum of understanding that doesn’t expire until the end of 2021, is subject to negotiation and a definitive deal, Nikola and GM stated in separate statements.
Under the new deal, GM will provide its fuel-cell system for Nikola’s Class 7 and Class 8 commercial semi-trucks, Nikola said. The companies are also talking about Nikola’s potential use of GM’s Ultium electric battery system in its commercial trailers.
Nikola officials said the new deal concentrates on the fuel-cell side of the business, where they see the greatest potential. They also said they remain confident of signing a deal by year end with an energy partner for building hydrogen-refueling stations.
Nikola’s shares declined almost 25% in afternoon trading, while GM’s shares dropped 1.7%.
Nikola also said on Monday it would refund all earlier submitted order deposits for the Badger as that rollout was dependant on a manufacturer partnership. Nikola officials stated the Badger was “paused indefinitely.”
“Heavy trucks remain our core business and we are 100% focused on hitting our development milestones to bring clean hydrogen and battery-electric commercial trucks to market,” Nikola CEO Mark Russell said.
GM said Nikola will pay upfront for the capital investment required for the fuel-cell capacity. The fuel-cell system will be constructed at GM’s Brownstown Charter Township battery plant located in Michigan.
