Nikola (NASDAQ: NKLA) shares skyrocketed 53% on Tuesday after General Motors announced it now has an 11% stake in the company. GM is set to manufacture Nikola’s Badger electric pickup by 2022.
“Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn’t dream of a better partnership than this,” Trevor Milton, Nikola’s founder and executive chairman, said in a statement.
General Motors shares were up approximately 9.1% during premarket trading following the news. With it’s new found USD2 Billion stake in Nikola, GM also has the right to nominate one board member as a reward for in-kind services. Furthermore, GM will be providing Nikola’s fuel cells worldwide, excluding Europe, as a resource for its class 7/8 truck.
“When we look at the opportunity to continue to leverage our technology — the Ultium battery platform system as well as the Hydrotec fuel cell technology — this is a wonderful validation of our technology, and then bringing our engineering and manufacturing expertise to the table,” GM CEO Mary Barra said in an interview on CNBC’s “Squawk Box.”
Milton, who was interviewed with Barra, added that apart from gaining a manufacturer, Nikola will also be granted GM validated parts, the Ultium battery technology and a multibillion dollar fuel-cell program.
“GM was very unique to us because they brought a lot more than just building the Badger,” Milton said. “It’s a perfect relationship. They’re one of the best purchasers, manufacturers, engineering houses in the entire planet.”