Nikola Badger in doubt as GM renegotiates deal
The troubled EV start-up Nikola Motors has admitted it could can the much-hyped Badger pick-up truck if its technology-sharing and production partnership with General Motors falls through.
Nikola and GM announced the intention to work together back in September, but a report by the short-seller Hindenburg Research released just days later cast doubts on the cash-free deal.
Hindenburg accused Nikola of deception, fraud and misleading investors. Despite vowing to defend his company against the allegations, big-talking Nikola founder and chairman Trevor Milton resigned soon after.
Nikola, which was valued at US$73 billion ($103 billion) in the days after its June reverse-merger float on the New York stock exchange has since plummeted in value to just US$7.85 billion ($11 billion).
GM has gone back to the table to renegotiate its deal with Nikola that was for 11 percent of the company – then worth US$2 billion ($2.8 billion).
US reports say GM could push to raise its stake in Nikola or seek warrants to guarantee or increase its equity if the company raises more money.
The two parties have until December 3 to decide if they will consummate the deal or go their separate ways.
If the latter scenario plays out, new Nikola CEO Mark Russell says the company will focus on its heavy trucks and hydrogen infrastructure roll-out rather than the Badger.
“The Badger is part of our discussions with GM. And we’ve been clear all along that we wouldn’t build a Badger without an OEM partner,” Russell told Bloomberg News.
Overall though, Russell struck a defiant tone about Nikola’s future if it did have to stand alone.
“We have the ability and we have a base plan of doing it ourselves,” he said.
“If we have a partner, that just enables us to consider going faster and helps reduce the risk,” he said.
“We’ve proven that over the years that we are a partnership company when those things are available to us.”
The Badger, which Nikola had said would eventually come to Australia, is one of a cavalcade of electrified pick-ups announced in the US, including the Tesla Cybertruck, GMC Hummer, Ford F-150, Rivian R1T, the GM-backed Lordstown Endurance and more.
But the Badger stood out because Nikola proposed it would be offered as both a battery electric vehicle and BEV/hydrogen fuel cell hybrid offering up to 965 kilometres range.
Along with the GM deal, the status of Nikola negotiations with energy giant BP to set up a chain of hydrogen refuelling stations across America remain unclear, as do plans to build a battery-electric semi in Ulm, Germany, starting in 2021.
Longer term it intends to build hydrogen trucks at its own plant in Coolidge Arizona.
