The Nikola company has made a name for itself exploring the idea of the electric truck, in a time when new vehicle fuel sources are burgeoning industry – but today’s headlines show a much vaunted deal between Nikola and General Motors being whittled down and reduced to a deal on fuel cell production, with an expected electric pickup truck plan getting shelved.
Reuters today reported that Nikola will no longer plan to produce its Badger electric pickup truck, and GM is forgoing a planned $2 billion equity stake in the company.
Reports at the New York Times show that the Nikola company is under pressure due to rumors that leaders allegedly oversold the technology available for the Badger’s production; top brass at Nikola are also being investigated by the U.S. Department of Justice and the Securities and Exchange Commission for potential securities fraud.
“September’s announcement had lifted Nikola’s stock and investor confidence in the start-up’s ambitious plans to develop heavy trucks powered by hydrogen fuel cells and a national network of fueling stations,” writes NYT reporter Neal Boudette. “But just days after the Sept. 8 partnership announcement, a small investment firm put out a report asserting that Nikola and its executive chairman, Trevor Milton, had greatly overstated how much technology the company had developed. Later that month, Mr. Milton resigned.”
The newly revised GM/Nikola deal shows how important it is to support new innovation in this sector and other highly competitive parts of the electric vehicle market. A lot of players are getting in on the game – Tesla and major national automakers are all racing to develop not only the vehicle hardware, but new autopilot systems for green vehicles.
As for GM and Nikola, as reported, both are down in today’s market activity, but while GM is still at long-term highs, having ticked down maybe 2% on the news, Nikola has tanked to around two thirds of its previous value earlier this month, and about half of what it was worth in late September.
What will fill the Badger’s void? If you are investing in auto tech or green living, keep both eyes on the EV market. Big things are going to happen.