General Motors (GM 1.12%) is taking a $2 billion stake in electric-truck start-up Nikola (NKLA 1.67%) and has agreed to build Nikola's Badger electric pickup. 

In addition, GM will supply the batteries and fuel cells for Nikola's electric tractor-trailer trucks, the companies announced. 

In return for $2 billion in newly issued Nikola shares and a seat on Nikola's board of directors, GM will provide Nikola with "in-kind services." Those services will include the engineering and development work needed to prepare the Badger pickup for production as well as access to GM's global parts bin, including GM's new Ultium electric-vehicle battery system and the Hydrotec hydrogen fuel cells developed by GM in a joint venture with Honda Motor (HMC 0.34%). 

A prototype Nikola Badger electric pickup truck.

GM will engineer, test, and build Nikola's electric Badger pickup, the companies announced on Tuesday. Image source: Nikola Corporation.

Under the deal, GM will be the exclusive supplier of fuel cells to Nikola in all parts of the world except Europe (where Nikola has a pre-existing deal with CNH Industrial's (CNHI -0.42%) IVESCO unit.)

While Nikola will pay GM separately for the batteries and fuel cells, and for contract manufacturing of the Badger truck, Nikola said that it expects to save over $4 billion in battery and powertrain costs over the next 10 years and over $1 billion in engineering and validation costs that it would otherwise incur if it developed the Badger and other components on its own.

GM said that it expects to receive over $4 billion in benefits from the deal, including the fees to manufacture the Badger, supply contracts for its batteries and fuel cells, the equity value of its Nikola stake, and the electric-vehicle tax credits that it will retain over the life of the deal. 

GM's stake in Nikola will be subject to a staged lock-up provision, meaning that GM will be able to sell its Nikola shares in stages, beginning in a year and ending in June of 2025.