Didn't see this hookup coming... 111-year-old GM is investing big in e-truck maker Nikola. Nikola is a six-year-old hydrogen-fueled electric truck startup that plans to sell electric trucks (products delivered so far = 0). Since its IPO in June, the biggest news to come out of Nikola was that it started taking preorders for its 2022 Badger electric pickup. The biggest news now:
Who got the short end of the gear stick?... At first, it seems like GM did. Not only is Nikola getting a $2B investment — it's also getting one of the world's most seasoned carmakers to crank out vehicles for it. Since Nikola went public, investors have been wondering whether it can actually deliver on the hype. With GM riding shotgun, they're feeling relieved. What does GM get?
The fastest way to scale is letting someone else do it for you... Designing a cool car is hard — manufacturing it at scale is way harder. GM brings the manufacturing expertise that young Nikola lacks. Tesla scaled on its own, but took 16 years to produce a respectable 100K cars/quarter and 17 years to deliver a full-year profit. Instead of building its own assembly lines and battery factories, Nikola can use GM's to scale faster and more cheaply.