Shares of Nikola, an electric vehicle company and hopeful Tesla competitor, surged more than 40 percent on Tuesday after announcing a partnership with General Motors (GM). GM stock popped as well — about 8 percent.
What does Nicola, a company with zero cars and next to no revenue, bring to the table for a giant of Detroit?
Basically it’s a win-win such. This partnership is all about automakers realizing that there’s only going to be a few platforms out there for electric vehicles.
GM’s Ultium battery technology platform gets validation. G is developing the battery platform, not just for its own electric vehicles but for other automakers as well.
GM plans to use the technology, as well as supply fuel cells to Nikola from its new facility in northeast Ohio.
As for Nikola, it’s electric pickup truck that comes out in 2022, will most likely be built by GM. Nikola will benefit from GM’s manufacturing expertise.
The company will avoid the long and stressful process of spending billions of its own money to build a manufacturing plant.
GM gets 11 percent stake in Nikola, and is banking on the longterm success of the company for profit.