Partnership

GM takes $2 billion ownership stake in Nikola, plans to engineer, manufacture Badger truck

General Motors anticipates having $4 billion in returns from its investment.

Photo courtesy of Nikola Corporation

General Motors (NYSE: GM) is expanding its stake in an alternative fuels future. The auto industry giant is receiving a $2 billion equity stake in Nikola (NASDAQ: NKLA) for in-kind contributions relating to the engineering and manufacturing of the company's hydrogen-powered pickup truck, the Badger.

The deal includes putting GM's hand in the full product planning process including engineering, validating, and homologating the Badger for both battery electric and fuel cell electric vehicle variants.

Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn't dream of a better partnership than this," said Nikola Founder and Executive Chairman Trevor Milton.

Nikola Badger Nikola has revealed renderings of its hydrogen- and battery-powered pickup truck. Photo courtesy of Nikola Corporation

"By joining together, we get access to their validated parts for all of our programs, General Motors' Ultium battery technology and a multi-billion dollar fuel cell program ready for production. Nikola immediately gets decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering and investor confidence. Most importantly, General Motors has a vested interest to see Nikola succeed. We made three promises to our stakeholders and have now fulfilled two out of three promises ahead of schedule."

Nikola says that the engineering and manufacturing process would have cost the company $4 billions in battery and powertrain costs over 10 years and $1 billion in engineering and validation costs. Through its $2 billion investment, GM expects to receive inn excess of $4 billion in benefits between the equity value of the shares, contract manufacturing of the Badger, supply contracts for batteries and fuel cells, and EV credits retained over the life of the contract.

Nikola will utilize General Motors' Ultium battery system and Hydrotec fuel cell technology. General Motors debuted the Ultium battery system earlier this year. It will be an integral part of the company's lineup in the future including the GMC Hummer EV pickup and SUV and Cadillac Lyriq.

Nikola Badger The Nikola Badger powered by hydrogen fuel cell technology will include a water tap in its cabin. Photo courtesy of Nikola Corporation

Nikola is expected to introduce the Badger in early December. Badger is expected to enter production by the end of 2022. Deposits are currently being accepted for the model. Early in the reservation process, Milton divulged that 1,500 people per day were reserving the truck.

Another side of the Nikola business deals with tractor trailer technology. General Motors will be the exclusive supplier of fuel cells globally (outside of Europe) to Nikola for Class 7/8 trucks. This will allow Nikola to validate and scale to a possible multi-billion dollar operation.

Nikola remains an independent company. The investment is subject to customary antitrust regulatory approval and closing conditions. The parties anticipate closing the transaction prior to Sept. 30, 2020.

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Honda notified dealers of upcoming supply cuts.

Photo courtesy of American Honda Motor Co., Inc

Honda, like all major automakers today, is truly a global operation. Though it produces plenty of vehicles here in the United States, many of the components it relies on for manufacturing come from elsewhere in the world. That means Honda, like the other auto giants, needs its global supply chain operating smoothly in order to prevent disruption. Unfortunately for Honda dealers and potential customers, disruption is what's about to happen. The automaker recently sent a letter to its dealers, forecasting reduced vehicle supply in the coming weeks.


2021 Honda Ridgeline No. 19 - Honda Photo courtesy of American Honda Motor Co., Inc


The dealer letter, posted to the Civic XI forum and fan site, was dated August 25 and confirmed by a dealer upset with the development, according to Automotive News. In the letter, Honda cites the ongoing pandemic and microchip shortages as major factors impacting its production efforts. Total shipments to dealers could be cut by up to 40 percent, but not all models will be affected to the same degree.

The letter noted that supplies of the Pilot and Passport SUVs will hold steady, and shared that production of the Civic hatchback is on schedule. However, the situation is fluid and could change at any time, so there's a chance that timelines could speed up or slack off as necessary.


2022 Honda Pilot Some models will see more cuts than others.Photo courtesy of American Honda Motor Co., Inc


Honda is just the latest in a long line of automakers struggling to keep pace with demand in the face of several converging global crises. In an effort to keep vehicles rolling out of factories, General Motors has implemented selective feature cuts in some of its new vehicles, such as the removal of engine start/stop tech from some trucks and SUVs. Earlier this month, Ford Motor Company told Mustang Mach-E buyers to expect delays of at least six weeks as it grapples with the chip shortage, and will temporarily reduce production capacity at a few of its plants.

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Electric vehicles

Three new EVs we can't wait to see

The F-150 Lightning is just one of several new EVs we'll see soon.

Ford

With all the crazy news coming out of the auto industry this year, it'd be easy to believe that the rollout of new models is slowing to a snail's pace. The pandemic and ongoing microchip shortage have slowed vehicle production, to be sure, but they haven't put the brakes on automakers' push to roll out exciting new electric vehicles. In the next few months alone, we'll see several new electric trucks, cars, and SUVs hit the market, some of which will break new ground and help define their segments. We're on board with this trend 100 percent, and to help you get excited, we've rounded up a few of our favorites.

Here are the three upcoming electric vehicles we're most excited to see.

Ford F-150 Lightning

One of the world's best-selling and most popular vehicles is going electric. The Ford F-150 Lightning is set to arrive in 2022 with a fully electric powertrain, forward-looking technology, and a familiar style that will make any truck lover feel at home. We don't have full details on the truck, but Ford has shared some awe-inspiring performance numbers. The Lightning will offer around 563 horsepower and 775 pound-feet of torque, which should push the truck to 60 mph from a standstill in just four seconds. Payload capacity comes in at up to 2,000 pounds, and towing will reach 10,000 pounds for specific configurations.


Ford F-150 Lightning The Lightning will offer impressive capability in a familiar package.Ford


The Lightning's starting price will come in under $40,000, but don't get your hopes up about actually buying one for that amount. Ford says the entry-level Lightning is a commercial truck that will be a stripped-down work-ready vehicle, which likely means features like vinyl seats and far fewer of the desirable tech goodies that you'll want. To get the truck you and your family will want to drive, you'll need to spring for the XLT model, which starts just shy of $53,000. That's quite a bit more, but it is still a somewhat reasonable price to pay for what will surely be a capable electric pickup.

Mercedes-Benz EQS

The S-Class is a unique model in Mercedes-Benz's lineup. The car typically showcases the automaker's latest technologies and design techniques and offers a glimpse of the features that eventually trickle down to the rest of Mercedes' vehicles. Soon, we'll see the EQS, a fully electric flagship sedan that paves the way for the brand's other electrified offerings. The car will have a range of well over 400 miles on a charge, up to 516 horsepower, rear-axle steering, and breathtaking technology.


Mercedes-Benz EQS The EQS will usher in a new electric era at Mercedes.Mercedes-Benz


The EQS is expected to land sometime late in 2021 and will carry a price tag that matches its premium brand name and top-notch feature set. Pricing for the "entry-level" EQS 450+ will come in at around $100,000, while the top EQS 580 4MATIC will land well north of that number. Remember, though, that Mercedes offers a long list of ultra-desirable options for its cars, so you'll likely shell out more than the base price to get the features you want.

Hyundai Ioniq 5

The Hyundai Ioniq name is nothing new, but the way it will be seen in the automaker's lineup will change significantly going forward. Rather than being a model name within the Hyundai catalog, Ioniq will split off and become its own sub-brand, covering a line of electric vehicles of all types. The Ioniq 5 is the first such vehicle and will be offered in single- or dual-motor configurations that generate 225 or 320 horsepower. The car's futuristic design is attractive and features a pixelated look for the front-end, lighting features, and rear. Inside, the vehicle is clean but comforting and offers the features buyers expect in a family crossover.


Hyundai Ioniq 5 The Ioniq 5 is the first in what will be an entire line of new EVs from Hyundai.Hyundai


The Ioniq 5 should go on sale in late 2021 and is expected to cost between $40,000 and $50,000.

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