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Wanna-be Tesla rival Nikola's stock is tanking after GM cancels deal
General Motors had agreed to build Nikola's hydrogen-electric Badger pickup truck. Nikola's scandals have sent that idea to an early grave.
After months of escalating controversy, General Motors has backed out of a deal to help Tesla-rival Nikola build its planned electric-hydrogen pickup truck. The extent of GM’s assistance with the production of the new Badger truck will be in supplying fuel cell hydrogen tech for the final build, Electrek reports.
GM and Nikola released a joint statement this morning about the termination of their previous agreement:
“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.”
Nikola's stock plummeted this morning after the news broke. It will be very, very difficult for the company's stock to rebound to its pre-scandal prices.
The Badger was always meant to be a shot directly at Tesla’s heart — most specifically at the yet-to-be-released Cybertruck, which Nikola’s founder, Trevor Milton, has voiced disdain over in the past. Now it’s looking a lot like the Badger won’t be arriving until Nikola can figure out another production method.
What’s up with this Nikola business? — In order to form a comprehensive picture of Nikola Corporation’s current affairs, it’s paramount to first understand that there aren’t actually any Nikola vehicles on the road. None at all. The company has been around since 2014, but it’s only ever created concepts — the first of which the public didn’t even see until 2016. Some of those concepts have been genuinely intriguing to the automotive industry.
Most recently, though, Nikola’s notoriety has been thanks to a series of scandals centering on founder and chairman Trevor Milton. Or should we say “ex-chairman” — Milton resigned in September after the Securities and Exchange Commission began investigating the company over allegations of fraud. Resigned with something like $3.1 billion in Nikola shares, that is.
Will we ever see this Badger? — At the focal point of Nikola’s deepest scandal yet is a 2018 video that purportedly showed a big rig truck, powered entirely by hydrogen fuel cells, as it drove down a highway. It turns out that video — which was meant to show off the power of those fuel cells — showed a vehicle that was actually just rolling down a hill.
With GM stepping out of the equation, for the most part, it’s looking less likely than ever that the Badger will ever make its way to consumers’ garages. Nikola has already begun taking deposits for the pickup truck…but at this point, it’s looking like even those with reservations may never see their trucks.
Nikola set out with a lofty goal: take down Tesla by out-innovating Elon Musk’s company. All those mock-ups have been for naught, it seems, leaving investors and interested customers high and dry. Meanwhile, all-electric pickups like Rivian’s and Ford’s upcoming electric F-150 are making actual, measurable progress in the industry. Nikola’s future is, at best, in flux.
