General Motors and Nikola Corporation have finalized a partnership first announced in September. But unlike the deal originally discussed, the memorandum of understanding (MOU) announced by the two companies Monday does not include plans for GM to manufacture the Nikola Badger electric pickup truck.
Under the potential supply agreement referenced in the MOU, GM will however supply its Hydrotec fuel-cell system for Nikola’s Class 7 and Class 8 commercial trucks, according to a press release from the automaker. The Hydrotec system will be developed at GM’s tech centers in Pontiac and Warren, Michigan, and manufactured at its Brownstown battery plant.
“It is expected that the potential arrangement would be cost plus, and that Nikola would pay upfront for the capital investment for the capacity,” GM said in a statement.
The two companies will also discuss use of GM’s Ultium battery system in Nikola commercial trucks, the press release said.
A “cost plus” agreement, with Nikola paying GM for its engineering services and manufacturing, is quite a turnaround from the original deal announced in early September.
That version of the partnership included a $2 billion GM investment in Nikola, and contract manufacturing of the Badger pickup. The Badger was dependent on a manufacturing partnership, so Nikola is cancelling the truck and refunding all deposits, the company said in its own press release.
The Badger, which Nikola previous said would use a battery pack and fuel cells to achieve a 600-mile range, always appeared to be on somewhat shaky ground.
It first shown as a series of renderings in November 2019, which were used by then-CEO Trevor Milton to troll Tesla CEO Elon Musk after the Cybertruck unveiling. Nikola confirmed plans to sell the truck in February—and began taking reservations—without showing even a prototype. The Badger was scheduled to be unveiled in December, but the event was cancelled due to coronavirus-related restrictions on large gatherings.
In October, newly-appointed Nikola CEO Mark Russell talked of a “base plan” the company could adopt if the GM deal fell through—which did not include the Badger, and would presumably hew closer to Nikola’s original business plan of building fuel-cell semi trucks and a supporting network of hydrogen stations. Earlier this year, the company broke ground on a one-million-square-foot factory in Coolidge, Arizona, to build these trucks, although recent video of the construction site has shown minimal progress.
Meanwhile, GM announced earlier this month that it had stepped its $20 billion electric-vehicle plan to $27 billion. Perhaps the automaker feels it’s better to invest in its own vehicles than those of a third-party upstart?