GM-Nikola partnership will create a formidable challenge for Tesla
General Motors Co. on Tuesday announced a strategic partnership with Nikola Corp. that will give it a $2 bn equity stake in the electric-vehicle startup.
Rather than pay cash for the ownership foothold, GM is paying in services: It will be the exclusive supplier of fuel cells for Nikola’s Class 7/8 trucks outside of Europe, provide access to its battery technology and take on the manufacturing and engineering work for Nikola’s Badger electric-pickup model.
GM rallied more than 7%, while news of its partnership with Nikola was one factor in a rout of Elon Musk’s electric-car darling Tesla Inc. that was the worst on an intraday basis since March. Tesla’s failure to gain membership in the S&P 500 Index also damped enthusiasm.