Nikola is a company that aspires to produce hydrogen trucks. On the morning of 30th December, Monday, NKLA stock experienced a massive decline right after the company made the announcement of terminating the deal that they had earlier announced. Nikola Company decided to cancel the General Motors deal by not closing it. As an alternative, both the companies will be signing an understanding based on a non-binding memorandum. According to this the usage of the cell technology based on hydrogen fuel of GM can be utilized by Nikola as well for the purpose of the semi-trucks in the future. As opposed to the actual plan, GM will no longer have stakes in NKLA.
As of Monday, the stock prices of Nikola has witnessed a decline of 26%. When the GM-NKLA deal was previously announced, NKLA stocks experienced a massive decline of 58% starting from the 8th of September to the present day.
No More NKLA Badger
This news of the cancellation of the GM automatically indicates the cancellation of the Badger which was planned to function as a pickup truck. According to the deal of GM in September, GM had intended to lend support in designing as well as building NKLA’s badger on the basis of cost-plus.
In case the deal was a success, it would have facilitated Nikola in selling these Badger trucks which otherwise they would not be able to manufacture. Additionally, Nikola had no way of profiting by selling the Badger.
It remains unknown whether the termination of the deal was driven by Nikola more or GM.
Sources suggest that Nikola is still focussing on producing heavy trucks for more profits in the future.