Detroit auto maker will engineer and manufacture the Nikola Badger pickup truck in exchange for 11% ownership
General Motors Co. ’s shares jumped after the auto maker said it would help an electric-truck startup develop and manufacture new models, the latest example of investor infatuation with electric vehicles.
In exchange for its services, GM said it would receive an 11% stake in Nikola Corp., a would-be rival in the market for electrified pickups.
Shares of both companies surged. Nikola rose 41% to $50.05 on Tuesday. GM shares finished up 8%, at $32.28.
The deal marks the latest tie-up between traditional auto makers and upstarts trying to break into the car business, and showcases GM’s strategy of providing its electric-vehicle technology to others.
Under the deal, GM will provide electric batteries and fuel cells for Nikola’s trucks, including its future Badger pickup truck, which GM will manufacture at a still-undisclosed location. GM will receive $2 billion in stock and a seat on Nikola’s board.