It was only three weeks ago when GM announced it would take a partnership stake in Nikola, the truck startup. Two days after that, a short called Nikola an “intricate fraud.” And then last week Nikola’s founder quit. This week, GM said the deal with Nikola “has not closed.” Life comes at you fast.
Let’s take a quick trip down memory lane, back to September 8, when GM pushed its press release about the partnership. Back then, GM said it was getting a $2 billion stake in Nikola in exchange for building the Badger, supplying batteries, engineering work, and a few other things.
Nikola’s stock was high-flying! It went even higher after the GM-Nikola announcement.
GM CEO Mary Barra had this to say back then:
“This strategic partnership with Nikola, an industry leading disrupter, continues the broader deployment of General Motors’ all-new Ultium battery and Hydrotec fuel cell systems,” said General Motors Chairman and CEO Mary Barra. “We are growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability. In addition, applying General Motors’ electrified technology solutions to the heavy-duty class of commercial vehicles is another important step in fulfilling our vision of a zero-emissions future.”
Fast forward to now, and Nikola’s stock is worth less than half of what it peaked at after the GM announcement, meaning that GM’s potential stake is worth less than half of the originally announced $2 billion, too. It would shock no one if GM simply took its toys and went home, since the partnership when it was announced, was not yet sewn up.
“The parties anticipate closing the transaction prior to Sept. 30, 2020,” was how GM put it at the time, which is tomorrow since we’re keeping score, though Reuters reports that the real deadline for pulling out by either Nikola or GM is December 3, according to the terms of the agreement.
Still, when the deal was announced there was no reason to doubt the September 30 date; when I asked GM for comment about that today its statement was brief but sure to point out what had not happened so far.
“Our transaction with Nikola has not closed. We are continuing our discussions with Nikola and will provide further updates when appropriate or required.”
Nikola struck a slightly different tone in its own statement to me:
Nikola continues to work with GM towards a closing and will provide further updates when appropriate or required.
Will this happen? Will this not happen? I’m guessing that if GM does move forward with Nikola the partnership might be on a smaller scale, or maybe GM will build some more hedges into it. Either way, as the last three weeks have shown, a lot can change in a minute.