Electric-truck maker Nikola plans to buy battery biz Romeo to secure its supply chain on the cheap

Oh Romeo, Romeo… where art thy batteries, Romeo? Yesterday, e-truck maker Nikola agreed to buy battery biz Romeo Power for $144M. Romeo was worth $1.3B when it went public via a SPAC in 2020. But then it ran up $250M+ in losses, and recently warned investors it might soon run out of cash.

• Extra juice: Nikola, Romeo’s biggest customer, has agreed to give Romeo $35M in “interim funding” to keep making batteries as the deal closes.
• Bringing home the batts: Since Nikola needs so many batteries, it expects to save $350M over four years through its purchase.
• Not just Nikola: Other EV makers like GM, Ford, Tesla, and Toyota are spending billions on battery factories with partners like LG and Panasonic.

A remarkable recharge… Not long ago, Nikola nearly ran out of juice itself. In 2020, Nikola’s ex-CEO resigned over fraud allegations (remember the infamous truck rolling down a hill commercial?). In the aftermath, Nikola’s billion-dollar GM partnership crumbled, and its shares have collapsed 90% from their 2020 peak. But last quarter Nikola shocked Wall Street by delivering its first trucks — and its first revenue. Now:

• Nikola expects to ship at least 300 trucks by year’s end. Batteries are among the priciest and hardest-to-find EV components, so consistent access is key to scaling.