It was just last week when General Motors (NYSE:) and Honda (NYSE:) signed a non-binding memorandum of understanding to establish a North American automotive alliance.
“This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources,” GM President Mark Reuss said. “Given our strong track record of collaboration, the companies would realize significant synergies in the development of today’s vehicle portfolio.”
GM started the week off with another announcement, once again teaming up with another auto manufacturer.
GM announced a strategic partnership with Nikola that will see GM produce the Nikola Badger by the end of 2022, while cost reductions will be carried through Nikola’s other programs. Nikola will utilize GM’s Ultium battery system and Hydrotec fuel cell technology, marking a key commercialization milestone for GM.
As part of the deal, Nikola Corp (NASDAQ:) will exchange $2 billion in newly issued common stock for the in-kind services and access to GM’s global safety-tested and validated parts and components. The deal, which sees GM acquiring about an 11% stake, also gives GM the right to nominate one member to Nikola’s board.
“Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn’t dream of a better partnership than this,” Nikola founder Trevor Milton said. “By joining together, we get access to their validated parts for all of our programs, General Motors’ Ultium battery technology and a multi-billion dollar fuel cell program ready for production.”
The partnership with Nikola is the latest push into electric vehicles by GM. Last week’s deal with Honda will see the two companies collaborate and combine their R&D efforts on future mobility technologies.
“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,” GM CEO Mary Barra said. “We are growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability.”
Shares of both companies reacted well to the news before fading with the overall market late yesterday. Shares of Nikola gained more than 40% while shares of GM jumped nearly 8%.
With GM making aggressive moves to prove that it isn’t going to be left behind as automobiles evolve, it will be interesting to see if GM makes more moves to compete in a crowded electric vehicle market.