The GM-Nikola Deal was supposed to be finalized today. But the dotted line will be left blank. This move comes after volley after volley of different controversies have hindered the startup automaker. Just two days after the GM-Nikola deal was announced, Hindenberg Research published an exposé with the sole intent to paint Nikola Motors and its founder Trevor Milton as frauds. Its stock plummeted. GM was subsequently painted as being had. And it was just the beginning.
Two weeks after the deal was announced, founder and executive chairman Trevor Milton resigned from the company. He then deleted his social media accounts. Then another bombshell followed this week: a sexual allegation report regarding Milton published by CNBC. Hindenberg Research didn’t have anything like that. Also, Tesla is suing them over its Class 6/7 truck design. A truck that, allegedly, was unable to run on its own power during a demonstration event.
All the while, the SEC is looking into Hindenberg’s original claims of fraud in regards to Nikola Motors.
The highest officers within General Motors claim that the company did its due diligence when forming the partnership with Nikola. Steve Girsky, former GM Vice Chairman from 2010-2014 (now current Nikola Executive Chairman, in place of Trevor Milton), is said to have facilitated the GM-Nikola deal, has said he is putting his decorated reputation on the line, insisting his team at investment firm VectoIQ had vetted Nikola thoroughly before presenting a deal to GM. Other former GM executives make up the VectoIQ team, including former Global Connected Customer chief Mary Chan, and furloughed car sharing brand Maven chief Julia Steyn.
But evidence is mounting to suggest otherwise. Now, according to The Detroit Free Press, the automaker seems to have blinked. GM will not finalize the Nikola deal on its “anticipated” closing date of today, September 30, 2020.
“Our transaction with Nikola has not closed. We are continuing our discussions with Nikola and will provide further updates when appropriate or required,” reads a prepared statement from GM. The automakers have until December 3 to finalize the existing deal, but analysts believe that the Detroit-based automaker will see this as an opportunity to alter the existing terms.
In the original deal, GM would develop, validate and build the electric/fuel-cell Nikola Badger pickup truck, due to market at the end of 2022, as well as supply its Ultium battery technology across Nikola’s products, including its Class 6/7 electric and hydrogen fuel cell semi trucks. In exchange, Nikola will give GM $2 billion in stock – an 11 percent stake in the company. General Motors has the right to nominate one board director at Nikola. Upon signing, GM would have been locked into Nikola’s stock until 2025. But the deal would have lasted for 10 years total.