General Motors buys 11% equity stake in electric truck maker Nikola
General Motors Co said on Tuesday it was acquiring an 11% stake in US electric truck maker Nikola Corp, worth about $2bn (roughly R33.88bn), and will team up with the nascent company to make a pickup truck powered by a battery-electric system and or fuel cell variants.
Shares of Nikola, which competes with Tesla Inc's Cybertruck, soared more than 30% to $46.30 (R785.07) in pre-market trade. General Motors will receive $2bn in newly issued Nikola stock and will get a right to nominate one director to the electric truck maker's board.
As a manufacturing partner, the leading US car maker said it will build the Nikola Badger with either an electric battery or fuel cell electric variants. Production is expected by the end of 2022 and will have lower costs across other models.
GM expects to receive benefits in excess of $4bn (roughly R67.76bn) between equity value of shares, contract manufacturing of the Badger, among other perks as part of the agreement.
The companies expect to save $4bn in battery and powertrain costs over 10 years and over $1bn (R16.94bn) in engineering and validation costs.
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