General Motors (NYSE: GM) won’t take an equity stake in startup electric truck maker Nikola Corp. (NASDAQ: NKLA), ending Nikola’s plans for its Badger pickup. But the two agreed to a nonbinding memorandum of understanding to explore using GM’s Hydrotec fuel cells in heavy-duty trucks.
GM originally planned to take an 11% stake in Nikola in exchange for producing the Badger, which Nikola heavily hyped under founder and former Executive Chairman Trevor Milton. The company would have had to pay GM $700 million to make the truck. Nikola will refund all order deposits received for the Nikola Badger.
Nikola had about $900 million in cash at the end of the third quarter. Most of that money is dedicated to building Nikola’s plant in Coolidge, Arizona.
“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,” Doug Parks, GM executive director of global product development, purchasing and supply chain, said in a press release.
Nikola and GM will discuss Nikola using GM’s Ultium batteries in future models.
Nikola shares fell more than 13% in premarket trading on the lack of a deal with GM.
This is a developing story.