Nikola CEO: We are prepared to 'go to market alone if we have to,' without General Motors
New Nikola CEO Mark Russell is ready to head down a path without would-be partner General Motors (GM), if that’s the end game from ongoing discussions between the two by a December 3rd deadline.
“Absolutely,” Russell told Yahoo Finance Live when asked if he is prepared with a plan to move forward that doesn’t include GM.
On September 8, Nikola said it selected GM to be its manufacturing parter for its electric pickup truck, dubbed the Badger. The Badger is expected to use GM’s widely acclaimed Ultium battery technology. Additionally, Nikola was slated to hand over $2 billion in stock to GM and also tap its battery-making prowess to develop semi-trucks.
But the highly publicized deal — which was expected to close on September 30 — has been thrust into tumult. Under fire from an early September report from short-seller Hindenburg Research, which questioned Nikola’s technology and overall potential, founder Trevor Milton resigned as executive chairman on September 21. Russell — who arrived at Nikola in 2019 after a stint as COO of Worthington Industries —took over as Nikola CEO soon after Milton’s exit.
Both Nikola and GM continue to say discussions are ongoing.
“That [going at it alone] was our base plan before we had the GM discussions. We have a fuel cell program that we have been working on with Bosch for a number of years. We obviously have a battery program — we are going into production with our own battery electric vehicles. That will be our base plan. We would love to have access to GM’s Ultium battery, both of us which have substantial technology and promise. But if we don’t, we’ll have a base plan and can go to market on our own if we have to,” explained Russell.
The go-it-alone plan for Nikola likely means no Badger pickup truck and a clear focus on making battery- and hydrogen-powered Class 8 trucks. It could also mean a capital raise sometime in 2021 as pre-revenue Nikola burns through cash to build out its truck manufacturing capabilities.
Says Russell on a potential capital raise, “We have said in our investor materials for some time — most of the year actually — we would do one more capital raise that would involve an equity raise. And that would be sometime in the next 12 to 18 months. We would do that opportunistically based on market conditions. So standby on that. That’s going to be our plan. We will plan to go back to the market for one more tranche of equity and we will do that when the conditions are best for that.”
Nikola also finds itself in hot water with the SEC. More on that here from Yahoo Finance’s Alexis Keenan.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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