Nikola Corp. and General Motors Co. announced a strategic partnership that begins with the Nikola Badger electric pickup and carries cost reductions through Nikola’s programs including the Badger; the Tre, One, and Two heavy trucks; and the NZT electric utility vehicle. As part of the agreement, Nikola will use GM’s Ultium battery system and Hydrotec fuel-cell technology, a key commercialization milestone for GM.
Nikola will exchange $2 billion in newly issued common stock for the in-kind services and access to GM’s global stash of safety-tested and validated parts and components. GM will receive 11% ownership of Nikola and the right to nominate one director. Nikola anticipates saving over $4 billion in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs. GM expects to receive in excess of $4 billion of benefits between the equity value of the shares, contract manufacturing of the Badger, supply contracts for batteries and fuel cells, and EV credits retained over the life of the contract.
GM will engineer, homologate, validate, and manufacture the Badger battery-electric and fuel-cell versions, basing the Nikola pickup on its BET (battery electric truck) platform.
Nikola will remain an independent company, be responsible for the sales and marketing for the Badger, and retain the Badger brand. The pickup was announced in February 2020 and will make its public debut in December at Nikola World 2020 in Arizona. Production is expected to start by year-end 2022 versus an earlier 2021 date originally announced in February.
“By joining together, we get access to their validated parts for all of our programs, General Motors’ Ultium battery technology, and a multi-billion-dollar fuel cell program ready for production,” said Nikola Founder and Executive Chairman Trevor Milton. “Nikola immediately gets decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering, and investor confidence. Most importantly, General Motors has a vested interest to see Nikola succeed.”
Avoiding the cost and time needed to build a manufacturing facility for the Badger was one of the biggest benefits of the deal, added Milton in a conference call with media.
“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,” said General Motors Chairman and CEO Mary Barra. “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.”
The agreement sees GM extending its fuel-cell technology to the Class 7/8 semi-truck market, which it competed in decades ago. It also represents high-volume commercialization of its Hydrotec fuel-cell system. GM will be the exclusive supplier of fuel cells globally (outside of Europe) to Nikola for Class 7/8 trucks, providing validation and scale in a multi-billion-dollar total addressable market. Fuel cells will become increasingly important to the semi-truck market because they are more efficient than gas or diesel, says GM, which sees additional growth opportunities in multiple transportation, military, stationary, and mobile-power end markets.
GM says that the Ultium batteries that are part of Nikola agreement are unique because the large-format, pouch-style cells can be stacked vertically or horizontally inside their packs, allowing engineers to optimize battery energy storage and layout for each vehicle design. Energy options range from 50 to 200 kW·h. The company believes its flexible, modular approach to EV development will drive significant economies of scale and create new revenue opportunities. Its joint venture with LG Chem will drive battery cell costs below $100/kW·h. The joint $2.3 billion plant for battery-cell production in Lordstown, OH, will be about the size of 30 U.S. football fields and ultimately produce 30 GW·h of annual capacity.
Since announcing Ultium battery technology in March, GM says that battery development work continues, including to get the costs down to below $100 per kW·h. The technology roadmap includes both silicon and lithium-metal anodes, which will improve vehicle range, affordability, and reduced dependence on rare and costly metals. Its technology is already demonstrating automotive-grade durability and significantly higher energy density.
In February, Nikola announced that the Badger pickup would be built in conjunction with another OEM, but said its truck would be unlike anything on the market. It expected its truck can be simultaneously powered by fuel cells and batteries. The five-seat truck shown in February measures 5900 mm (232 in) long, 1850 mm (72.8 in) tall, and 2160 mm (85.0 in) wide—with a 1560-mm (61.4 in) bed width. Top performance numbers are over 906 hp (675 kW) peak, 455 hp (339 kW) continuous, 980 lb·ft (1330 N·m) torque, and a top range of 600 mi (965 km). Electric acceleration from 0-60 mph (0-97 km/h) is in about 2.9 s.
Advanced software blending of batteries and 120-kW·h fuel cell, selectable by the driver at the touch of a button, enables that 600-mi (965-km) range. The truck can go up to 300 mi (482 mi) on the 160-kW·h, flooded lithium-ion battery module alone for those that do not have access to hydrogen. However, Nikola is currently planning 700 hydrogen stations to give North America hydrogen coverage, with initial hydrogen station locations to be announced this quarter.
The GM deal with Nikola follows one it announced with Honda in April to jointly develop two all-new electric vehicles for Honda based on GM’s highly flexible global EV platform powered by Ultium batteries. In September, the companies announced preliminary discussions toward establishing a broader North American automotive alliance intending to share common vehicle platforms, including both electrified and internal combustion propulsion systems that align with the vehicle platforms. Co-development planning discussions will begin immediately, with engineering work beginning in early 2021.
