Nikola Investors Don't Look Pleased With General Motors Partnership

The long-anticipated conclusion to a September deal in the electric vehicle space was announced Monday.

What Happened: Nikola Corporation NKLA and General Motors Company GM announced a supply agreement that will see General Motors provide Hydrotec fuel cell systems for Nikola’s Class 7/8 trucks. The companies will work together on mutually agreed specifications for the fuel cell systems.

Nikola will pay upfront for the capital investment for capacity.

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Why It’s Important: This is far less than Nikola and its investors had hoped for. Back in September, Nikola and General Motors announced a partnership that would have included GM investing $2 billion for an 11% stake in Nikola. Shares of Nikola shot up 39% to $49.75 on the news of that deal.

Nikola said Monday it's also forgoing plans to build the Badger pickup truck, which was anticipated with the GM financing news in Septemeber.

Monday's announcement from Nikola and General Motors comes as investors weigh lock-up expirations from former SPAC Nikola. Former CEO Trevor Milton owns 91.6 million shares that are available to sell beginning on Dec. 1. Separately on Monday, Nikola announced plans from insiders to sell 53.39 million shares.

NKLA Price Action: Shares of Nikola were down 21% to $21.94 at publication time.