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GENERAL Motors has stamped a $A3 billion deal with fuel-cell and electric vehicle hopeful Nikola, taking an 11 per cent share in the EV company and committing to engineer and build its 2022 Badger fuel-cell ute.

The move is a masterstroke for Nikola which says the deal will save it $A6 billion in investments in EV technology and gives it access to ready-made vehicle production facilities.

For GM, the deal offers it a pathway into EV pick-ups; a segment where GM makes most of it profits.

The deal coincided with a massive 21 per cent drop in the value of Tesla shares as Tesla investors sitting on top of a huge pile of market capitalisation became spooked by the thought that GM has secured a shortcut to take on Tesla’s planned pick-up and trucks. (See separate article)

It is GM’s second partnership announcement in less than two weeks after announcing a joint venture with Honda to share costs in building battery EVs and vehicles with conventional internal combustion engines.

The news also comes seven months after GM showcased 13 EVs that it intended to add to its model range by 2025. These included a new Chevrolet Bolt EV, GMC Hummer ute and SUV, a mid-size Chevrolet SUV, Cadillac Lyriq SUV, two Buick SUVs and the flagship Cadillac sedan called “Celistiq”.

Badger fuel-cell ute

GM has 12,000 employees of its 20,000 staff at the Warren, Michigan technical centre working on EVs.

The tie-up with Nikola – which plans to launch the Badger in late 2022 and three heavy-duty trucks in early 2023 – means GM can supply its own battery EV and fuel-cell systems.

For the 11 per cent share in Nikola, GM will get $A3 billion worth of Nikola’s newly-issued common stock. GM said it expects more than $A6 billion in benefits including manufacturing the ute, and sales of its battery EV and fuel-cell technology.

Nikola said it forecast the deal would save it more than $A6 billion in costs relating to battery and powertrain components over 10 years.

In a statement, Nikola said it would be responsible for the sales and marketing of the Badger and keep the Nikola Badger brand. GM also will supply batteries for other Nikola vehicles including the three trucks – the One, Two and IVECO-based Tre. The Tre is targeted for European and Australian markets.

“We are growing our presence in multiple high-volume EV (electric vehicle) segments while building scale to lower battery and fuel cell costs and increase profitability,” GM CEO Mary Barra said in a statement.

At the March launch of the GM EV model line-up for 2025, Ms Barra said: “I believe in my heart that we are going to be leaders in electrification.”

“We’re going to keep working at it no matter what others say. They will either believe, or we’ll show them, and then they’ll believe.”

The centrepiece to GM’s EV technology is a new battery system called Ultium that is modular and allows different types of cells to be used in packs ranging in size from 50kWh to 200kWh with a range of 600km and more.

GM makes the Ultium, which reduces the amount of cobalt used by 70 per cent to reduce costs, with battery manufacturer LG Chem.

Badger fuel-cell ute

GM said that most of its upcoming EVs will use 400-volt battery packs with up to 200kWh fast-charging capacity while the GMC Hummer EV and future EV utes will use an 800-volt battery pack and 350kWh charging.

The company said both battery packs can be charged to a 160km range in 10 minutes.

The rollout of GM’s EV models begins with a new version of the 259-mile (433km) Bolt EV, using second-generation EV architecture, launching in late 2020.

GM expects global Bolt sales to double in 2020 to about 50,000 units with US sales of about 30,000 units a year; a year-on-year increase of about 80 per cent.

It then plans to launch the Cruise Origin, a self-driving electric shared vehicle, that uses third-generation architecture and a new battery system.

By mid 2021, GM said it expects to launch the electric Bolt SUV and Cadillac Lyriq SUV in China and by 2022, in the US.

These will be followed by the GMC Hummer EV in early 2022.

By Neil Dowling

KPMG
MotorOne
Schmick