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GM Bails on Nikola

November 30, 2020

Global supply agreement focused on GM’s Hydrotec fuel cell system for Nikola’s Class 7/8 trucks
Non-binding MoU replaces previous transaction announced Sept. 8, 2020

General Motors has signed a non-binding memorandum of understanding with Nikola Corporation for a global supply agreement to provide its Hydrotec fuel cell system for Nikola’s Class 7/8 semi-trucks. The MoU replaces the previous transaction announced Sept. 8, 2020.

Nikola shares tanked 26% in trading Monday morning after GM noted that it gave up an equity stake in the electric truck start-up. Plans to build the Badger, Nikola’s pickup truck for consumers were dropped. In September, the automakers made a $2B agreement which gave GM an 11% stake in Nikola to supply battery and fuel cell technologies as well as produce the Badger pickup.

“This supply agreement recognizes our leading fuel cell technology expertise and development,” said Doug Parks, GM executive vice president of Global Product Development, Purchasing and Supply Chain. “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.”

Under the potential agreement referenced in the MoU, GM would engineer its Hydrotec fuel cell system to the specifications mutually agreed upon by both companies. GM and Nikola will discuss the appropriate scope of services that GM would provide for the integration of the fuel cell system into Nikola’s vehicles. It is expected that the potential arrangement would be cost plus, and that Nikola would pay upfront for the capital investment for the capacity. GM and Nikola will also discuss the potential of a supply agreement for GM’s versatile Ultium battery system for Nikola’s Class 7/8 trucks.

GM’s Hydrotec fuel cell system will be engineered at its Michigan technical facilities in Pontiac and Warren and manufactured at its Brownstown Charter Township battery assembly plant.

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