Nikola (NASDAQ:NKLA) stock received a major boost on Tuesday after making a major business announcement.
In a release, the company said it is entering a strategic partnership with General Motors (NYSE:GM), in which GM owns 11% of Nikola and has the right to nominate one director. In turn, Nikola will have access to GM’s Ultium battery system and Hydrotec fuel cell tech.
Additionally, Nikola will exchange a $2 billion equity stake for “in-kind services” from General Motors, such as safety-tested components. GM will comply with lock-up provisions starting next year and ending in June 2025. Overall, General Motors will play a major role in both the battery electric and fuel cell versions of the Nikola Badger.
Trevor Milton, founder and executive chairman of Nikola, had this to say about the NKLA stock news:
“Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn’t dream of a better partnership than this. … Most importantly, General Motors has a vested interest to see Nikola succeed. We made three promises to our stakeholders and have now fulfilled two out of three promises ahead of schedule.”
Moreover, Nikola is still responsible for the sales and marketing of the Badger model, and will keep the brand. And, according to the release, production of the Badger is expected to start in late 2022 at a location to be announced at a later date.
NKLA stock was up nearly 50% as of Tuesday morning.
On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Nick is a web editor at InvestorPlace.