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Commentary & Voices

Nikola and General Motors Announce a Strategic Partnership


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Electric vehicle startup Nikola Corp. and General Motors Co. announced that they are forming a strategic partnership that begins with the Nikola Badger and carries cost reductions through the range of Nikola vehicles. As part of the agreement, Nikola will use General Motors’ Ultium battery system and Hydrotec fuel cell technology.

Cox Automotive analysts weigh in with their thoughts on this latest move from GM.

Michelle Krebs, executive analyst, Cox Automotive

General Motors clearly is executing an ambitious plan of strategic alliances that accelerates electrification through sharing resources and costs while also providing a bridge through vehicle platform sharing with Honda to that electrified future. What’s becoming clear is that no single company has enough resources to go it alone towards a future that is electrified, connected and autonomous.

Like the Honda alliance announced last week, GM’s arrangement with startup Nikola will help proliferate GM’s newly developed Ultium battery systems. Higher volume theoretically means lower cost, and the premium cost has been an obstacle to EV adoption in the U.S., according to Cox Automotive studies.

Even more in the future, Nikola is working on fuel cell commercial trucks. GM has a long history in fuel cells and also is partnering with Honda on them. Combining forces may lead to a fuel-cell future faster than any one company going it alone.

Brian Moody, executive editor, Autotrader

Fuel cells aren’t getting the attention they deserve. In other applications, fuel cells are seen as a reliable energy alternative, but only a handful of automakers seem interested. Right now, Honda, Hyundai and Toyota have fuel cell powered cars available to consumers in some regions. Fueling is similar to the process consumers already use for gasoline-powered cars, and the refill rate is much quicker than most plug-in options. By GM forming a partnering with Honda and now Nikola, it shows they’re serious about alternative fuel vehicles.

Eric Ibara, executive analyst, Kelley Blue Book

Technological developments impacting the automotive industry are forcing manufacturers to place bets on which areas will resonate with future consumer demand. Between autonomous vehicles, electrification, and the shift to SUVs and trucks, a company’s balance sheet can be stretched to the breaking point trying to cover all bases. In this regard, GM is clearing looking to the future.

Already a leader in EV development, GM also has a history experimenting with fuel cell vehicles. Its partnership with Honda and now with Nikola further increases the likelihood that their bets will pay off. Combined with investments in Cruise Automation, the autonomous driving technology company, and their development of the Ultium battery, GM really looks to break out of the pack as a leader in this global competition. Wall Street seems to agree as its stock price has spiked 10% in intra-day trading today. This should be a wake-up call to other manufacturers.

See Cox Automotive Commentary on the GM and Honda North American alliance that was announced last week.

If you would like to speak with one of the expert analysts from Autotrader, Kelley Blue Book or any member of the Cox Automotive Industry Insights team, please contact us.

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