“o. itemList. length” “this. config. text. ariaShown”
“This. config. text. ariaFermé”
(Bloomberg) – General Motors Co. ‘s shares peaked six months after taking a $2 billion stake in the startup Nikola Corp. and agreed to manufacture a new model of electric van.
In an effort to diversify the Detroit-based car manufacturer’s choice fuel vehicle strategy, GM will bring generation and production in exchange for an 11% stake in Nikola and a seat on the board, according to a statement released Tuesday. transaction.
The association provides Nikola, who has not yet generated significant revenue, a rapid increase in the legitimacy and commercial strength of an established player, while reaping GM’s profits. The largest automaker in the U. S. is the largest car manufacturer in the U. S. But it’s not the first time Expect to get over $4 billion in settlement benefits. In addition to the net value of the shares, you will be paid to manufacture Nikola’s pickup truck, generate batteries and start marketing mobile fuel generation for the semi-trailer industry.
The actions of any of the corporations rose in the face of the wonderful announcement, and GM reached the point since the coronavirus pandemic began. GM rose 8% to close at $32. 38, closing since February 24, Nikola jumped 41%, while electric car market leader Tesla Inc. fell. 21% for his biggest fall in a day.
Read: Tesla falls more than ever after GM, S’ Nikola Stake
“We’ve already noticed those outbursts” in GM’s stock, said David Whiston, an analyst at Morningstar Inc. “I hope it lasts. GM obviously gets enough credits for its electric vehicle program. “
By expanding its exposure to fuel vehicles of choice, GM is strengthening its presence in a domain that has captured the attention of investors who have accumulated in shares of electric vehicle start-ups like Nikola. Both corporations expect production of the truck, called Badger, to begin. Nikola plans to launch the vehicle, which has so far shown only photographs, in early December.
Test case
The new pickup truck may also compete with GM’s electrification plans for long-term models, such as a promised Hummer pickup truck to go on sale by the end of next year, but GM would possibly see the Badger as a verification case for the call for battery-based cars in the advertising truck market. And the resolve to paint with Nikola illustrates GM’s efforts to spread his bets and not stay behind.
The agreement follows Ford Motor Co. ‘s investment last year at Rivian Automotive Inc. , a subsidized electric vehicle start-up through Amazon. com Inc. GM had a previous agreement with Rivian that collapsed, allowing its rival Crosstown to launch. GM has faced pressure from investors to turn its electric vehicle business into a new entity.
“GM lost in Rivian” to Ford, said Michelle Krebs, executive analyst at Autotrader, an auto buying researcher. “Nikola is a kind of substitute. Maybe this is driving GM to integrate into their electric vehicle business, as some on Wall Street have done. “advises to value.
In addition, GM can retain 80% of the regulatory credits for electric cars from Badger truck sales and is entitled to reject the remaining 20% first. This will help the automaker comply with emissions regulations as it focuses on the game. Successful application cars and gas trucks. GM will also be the exclusive supplier of Nikola batteries in all markets in Europe, said a corporate spokesman.
What Bloomberg Intelligence says:
“General Motors’ $2 billion stake in the hydrogen electric and semi-trailer car manufacturer Nikola – a $13 billion market capitalization company with no revenue or cars sellable to date – is a coverage opposed to the overall threat of not promoting a competitive option through Volume Transmission Cars. Nikola is no more complex than GM, but the partnership will be the legacy automaker’s logo belief. “
– Kevin Tynan, senior automotive analyst Click to investigate
GM’s dangers favor a new rival in the same way as the first investments in Tesla through Daimler AG and Toyota Motor Corp. They helped this electric car company become a fierce competitor, but GM CEO Mary Barra sees plenty of room for expansion into the nascent vehicle market industry and noted that GM had access through Nikola to Class 7 and Class 8 cargo truck operations.
“We see opportunities for mass expansion for any of us,” Barra said during a call with reporters. “There will be many opportunities for other consumers and products. When you plan to marry Nikola in categories 7 and 8, this is very open opportunity for us. “
Shooting at the arm
For Nikola, the partnership with GM is a justification for his efforts to gain credibility as he moves toward producing his first vehicles. The Phoenix-based company organized an opposite merger in June, securing a public directory and further carrying out its ambitious plans. to enter the market for mobile fuel and battery vehicles. He picked up his percentage of enthusiasts and skeptics, with whom founder Trevor Milton joined on twitter, where he promoted the corporation and sought to quell criticism.
“This news is a big condiment for Nikola,” Wedbush Securities analyst Dan Ives said Tuesday with a “neutral” score on the company’s stock. “There have been many skeptics around the ambitions of Nikola and its founder Trevor Milton over the next few years, who have now thrown the window with the brave GM making a major strategic bet on Nikola for the next decade on the front lines of electric cars and fuel cells. “
Milton, who is also Nikola’s president, said the Badger would sell for between $60,000 and $90,000, which analysts say could be a successful niche in America’s largest truck market. He also said he hoped the Badger would one day compete with the Ford Motor Co. F-150, which has been the best-selling pickup truck in the United States for 43 years.
Nikola will save around $4 billion in progression prices by partnering with GM, Milton said in a tweet Tuesday. “Who more than GM to design, validate, verify and manufacture,” he said.
Just a year ago, Nikola had no plans to build a pickup truck, just a concept that solidified in November after Tesla presented a prototype of its own futuristic electric truck. Nikola first introduced the Badger in February and began receiving advance orders. buyers in June.
GM technology
Nikola is not targeting van buyers with a more sustainable option. Rivian and Ford plan to start generating an electric van until June 2021. Ford promises an electric F-150 until 2022 and Fiat Chrysler Automobiles NV has announced that it is contemplating an electrified edition of its Ram pickup truck.
Most of the generation will come from GM, which means Nikola’s contribution will basically be in sales and service to buyers of his pickup trucks and cargo trucks, and the deal will allow Nikola to start promoting cars sooner.
“They have a fuel cell phone in production position right now,” Milton told reporters in a call. “The smart thing about this is that it allows us to market Badger without delay. “
(Analyst quote updates in the fifth paragraph)
For more items like this, visit bloomberg. com.
Subscribe now to forward with the ultimate source of reliable business news.
© 2020 Bloomberg L. P.