General Motors has done an about-face on its planned partnership with electric auto startup Nikola- sending Nikola shares plunging.
GM pulled the plug on supplying batteries, other parts, and factory space for Nikola's proposed Badger electric pick up truck....
effectively putting plans for the electric model on ice. Nikola will now have to refund deposits.
The two also announced Monday that GM will no longer take an 11 percent equity stake in Nikola or get $700 million as stated in the original deal announced in September.
GM was forced to rethink its partnership with Nikola after a short-seller criticized Nikola for being a fraud. Something Nikola has denied.
But GM isn't walking away completely from the startup. Under a new deal, GM will supply its fuel-cell system for two of Nikola's commercial semi-trucks and the two are also discussing the potential use of GM's electric battery system in Nikola's commercial trailers.
GM's original interest in a partnership with the startup had been seen as a vote of confidence in Nikola, but with that deal now scrapped, Nikola shares were pummeled on Monday. The stock lost one-fourth of its value.
Fellow electric automaker Tesla was knocked off an all-time high by the news.
Shares of GM were down slightly.