By Rachit Vats and Ben Klayman
DETROIT - General Motors and electric truck startup Nikola Corp will join forces to build electric pickup trucks and fuel cell commercial trucks to take on Tesla.
As part of a multi-part, multibillion-dollar deal, GM received an 11% stake in Nikola, and in return for the Nikola shares, GM will supply Nikola with batteries, a chassis architecture, fuel cell systems and a factory to build the startup's proposed Nikola Badger pickup, which claims to be the most advanced electric pick-up in the world.
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It will compete with Tesla's Cybertruck, as well as electric pickups planned by startup Rivian, Ford and GM itself.
Nikola claims the Badger will have a range of 960km, compared with the Cycbertruck's claimed range of more than 800km. The Cybertruck and other electric pickups have not launched yet.
GM's first electric pickup truck, the GMC Hummer, is due in late 2021. GM will build the electric and fuel cell versions of the Nikola Badger truck and the companies expect production by the end of 2022.
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Nikola said it expects to save $4 billion (R67bn) in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs.
Nikola CEO Trevor Milton said that avoiding the cost of building a pickup truck assembly plant and developing a truck chassis was "a big deal for us." Nikola's Badger will now share major components under the skin - and a supply chain - with the GMC Hummer.
"We are going to swap out our platform for theirs," Milton said.
GM Chief Executive Mary Barra said the companies were introduced to each other by former GM vice chairman Steve Girsky, who took Nikola public through a reverse merger with his special purpose acquisition company earlier this year.
The alliance with Nikola is the second major deal in a week for GM and highlights the pressures faced by the motor industry to share costs to meet demands for cleaner vehicles. Last week GM announced a North American alliance with Honda.
The agreements also signal the urgency of Barra's efforts to convince investors that GM can slash costs in its traditional, internal combustion business and develop a profitable, viable electric vehicle business.
Last year, GM failed to reach a deal with Rivian, which then sold a stake to Ford.
Reuters