General Motors’ partnership with Nikola Motors has remained stagnant as the deal’s termination date moves closer, reports indicate.
GM and Nikola first agreed to work together to develop battery and fuel cell electric vehicles in early September. GM was set to receive a $2 billion equity share in Nikola and invest $4 billion in battery and powertrain costs over the next ten years.
However, things didn’t go according to plan, as a report from Hindenburg Research revealed Nikola was not honest in their display of the Nikola One semi-truck. The report labeled the automaker as “an intricate fraud” and revealed that they had been misleading in their vehicles’ displays.
*NIKOLA REPRESENTATIVE SAYS NOTHING NEW ON GENERAL MOTORS$NKLA
— *Walter Bloomberg (@DeItaone) November 18, 2020
Afterward, CEO Trevor Milton stepped down from his post, and the partnership between the two companies was put into question. GM has not made any strides toward finalizing the partnership, and a Nikola representative stated this morning that talks have not moved whatsoever since late September.
As a result of the stagnated talks, speculation persists that the two companies may have trouble finding common ground on what the advantages may be moving forward. For one, GM is expected to funnel a substantial $6 billion sum into Nikola, who has yet to release a functional vehicle to consumers. Additionally, the 10-year contract would lock GM into developing fuel cell and battery research for Nikola, who has been relatively irrelevant since Milton’s public stepdown.
GM will have until December 3rd, 2020, to close the deal after it was initially supposed to be finalized on September 30th. GM can terminate the contract with no penalties until the December 3rd cutoff.
GM’s most recent statement concerning the matter was announced on September 29th, where the company stated that the deal “has not closed” and that it was “continuing its discussions with Nikola and will provide further updates when appropriate or required.”