General Motors has ended a previously announced deal with Nikola, which would have seen it supply production capacity, engineering services and technology to the Utah-based startup in exchange for shares.
Instead, the two companies have hammered out a new deal much smaller in scope than the previous deal announced on September 8. The new deal, announced Monday, will see GM supply hydrogen fuel cell stacks to Nikola for use in semi-trailer trucks.
Specifically, GM will engineer a fuel cell stack to meet the requirements of Nikola's planned Class 7 and Class 8 semi-trailer trucks. In return, Nikola will pay upfront for the capital required for GM to engineer the fuel cell stack, and later the cost for the actual stacks as they are delivered.
GM and Nikola have only entered a memorandum of understanding, meaning the deal is not yet binding. The two companies will also discuss the potential for GM to provide services for the integration of the fuel cell stack into Nikola's trucks, as well as the potential for GM to supply its new Ultium batteries to Nikola.
Under the original deal, which was meant to close Sept. 30, GM was to take an 11% stake in Nikola—then worth about $2 billion—together with payments of up to $700 million for contract production of Nikola's planned Badger pickup truck. The Badger is a battery-electric full-size pickup that Nikola planned to offer with a fuel cell range extender. Under the terms of the original deal, GM was to supply a platform for the Badger, and manufacture the truck at one of its factories.
However, two days after the original deal was announced, short-seller Hindenburg Research released a report saying it believed Nikola is a "fraud," claiming CEO Trevor Milton had falsely claimed to have proprietary technology.
The allegations prompted the Department of Justice and Securities and Exchange Commission to probe Nikola, and Milton stepped down Sept. 21. Since then, two women have also filed sexual assault claims against Milton.
In a statemant Monday, Nikola said it would refund customer deposits already paid for the Badger as the vehicle's rollout was dependant on a manufacturer partnership. The company said it now plans to focus on its heavy trucks.