Before the initial negotiations were disrupted with the release of the Hindenburg report, the two companies had a deal.
Nikola and GM continue to negotiate
The GM-Nikola alliance was anchored with plans for Detroit-based vehicle manufacturer to build the EV manufacturer’s Badger pickup, chassis architecture for the vehicle, and supply electric batteries.
GM also committed to constructing the factory to build the Badger pickup and to manufacture the fuel cell system for future Nikola heavy cyber trucks.
As a deal “incentive” GM would keep 80% of EV regulatory credits generated by the Badger pickup.
GM also retains the right to buy the remaining 20% of the EVs at market rates, which would help GM offset sales of its gasoline-powered vehicles.
EV Credits make a difference in the deal
To put it in perspective, EV credits can make a big difference in profitability. Tesla has been an innovator in using the EV credits.
Last quarter, EV credits helped Tesla to earn $428 million, a company record, and a 64 percent increase compared to last year.
