The Nikola Badger already has a manufacturing partner. It will not be FCA, as we previously expected. Not an independent manufacturing supplier, such as Magna Steyr. The company in charge of producing the electric pickup truck will be General Motors. Or GM, if you prefer.
The agreement between the companies goes beyond the Badger manufacturing. The Badger will use GM’s Ultium batteries. More than that, the Nikola One, Two, and Tre trucks will have GM’s Hydrotec fuel cell technology all over the world except in Europe. Nikola does not speak about the reasons why, but it probably has another deal in place there for the Tre fuel cells.
GM will also become one of Nikola’s investors with an 11-percent ($2 billion) stake at the new company as a payment for what they call “in-kind contributions.” These services include the engineering, validation, and homologation of the Badger both for its pure electric version and for the FCEV derivative as well.
Nikola expects that to save $1 billion in engineering and validation costs, as well as $4 billion in battery and powertrain costs over ten years. GM also believes it will benefit not only from the equity appreciation but also for other synergies such as supply contracts for batteries and fuel cells, as well as EV credits. In other words, all “regulatory credits” Nikola gets will probably have GM as their primary customer.
Check what Mary Barra, GM’s CEO, had to say about the partnership:
“This strategic partnership with Nikola, an industry-leading disrupter, continues the broader deployment of General Motors’ all-new Ultium battery and Hydrotec fuel cell systems. We are growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability. In addition, applying General Motors’ electrified technology solutions to the heavy-duty class of commercial vehicles is another important step in fulfilling our vision of a zero-emissions future.”
Nikola still plans to deliver the Badger by the end of 2022. It will produce it in a GM plant that is yet to be disclosed.
Although Trevor Milton celebrates the deal, it makes us wonder what role will Nikola have in developing its vehicles. Won’t the Badger be just a GM electric pickup truck with another appearance? What will make it stand apart from GM’s future products, such as the GMC Hummer?
If you believe the FCEV version of the Badger will be that difference, bear in mind that GM will supply the fuel cells and the batteries. What will prevent it from applying the same solution to its electric pickup trucks? We could have an FCEV GMC Hummer, couldn’t we?
That said, why would people prefer to buy a Badger from Nikola instead of a GMC Hummer from GM? How many dealerships will Nikola have compared to the dealership network GM can count on?
That paints an entirely new perspective about the core business for Nikola. Instead of earning money from selling its vehicles, it will probably make a profit with the clean hydrogen network it aims to establish with PPA agreements. In that sense, the more FCEVs in need of hydrogen, the better.
Would that explain the deal with GM? Will Nikola focus on the Class 7/8 trucks market, where it will face no GM competition? Join the discussion with us in the comments below or at the Nikola section of InsideEVs Forum.
Ask questions or tell us what you think about the GM / Nikola partnership on this InsideEVs Forum thread.