What happened

Shares of embattled electric-truck start-up Nikola (NKLA -0.40%) were trading higher on Wednesday, after CNBC's auto industry reporter said General Motors (GM 1.23%) might take a larger stake in Nikola than previously expected. 

As of 11:30 a.m. EDT, Nikola's shares were up about 13.9% from Tuesday's closing price.

So what

In a report on the network on Wednesday morning, CNBC's Phil LeBeau said that while Nikola and GM have yet to come to a deal, talks are ongoing -- and auto investors shouldn't be surprised if GM takes a larger stake in the truck start-up than the roughly 11% it agreed to earlier in the month.

GM and Nikola announced a partnership on Sept. 8 in which GM will develop and build Nikola's Badger pickup, and sell batteries and fuel cells to Nikola for its electric semis, in exchange for $2 billion in newly issued Nikola stock at about $42 per share. At that time, GM and Nikola said they expected the deal to close by the end of September.

A silver Nikola Badger electric pickup truck.

GM might still agree to build Nikola's Badger. Image source: Nikola Corporation.

Since then, however, Nikola's stock has lost more than half its value as the company has scrambled to respond to a short-seller's allegations that founder Trevor Milton had misled investors. Those allegations have triggered an investigation by regulators, led to Milton's abrupt departure from Nikola -- and, it appears, given GM grounds to renegotiate the terms of the partnership deal.

Nikola's stock declined on Tuesday on growing concerns that a deal with GM wouldn't happen by the original deadline; it's up today because LeBeau reported that while it may not happen today, it's still likely to happen -- albeit on terms more favorable to GM.

Now what

Simply put, without the GM deal, the post-Trevor Milton investment case for Nikola gets very thin. At this point, we know that GM's fuel-cell and battery technologies are superior to whatever Nikola managed to develop on its own -- and there's no way that Nikola could build the Badger by itself.

It's less important to GM -- meaning that GM could still walk away -- but it's still significant. GM would love to have Nikola's business to add scale to its battery and electric-pickup programs and its fuel-cell joint venture with Honda Motor, but GM isn't risking any money up front and it doesn't need the deal. Under the circumstances, it makes sense for the Detroit auto giant to press for a larger stake -- but that said, auto investors should't expect GM to get (or want) control of Nikola. 

Long story short: A deal between GM and Nikola is still likely, but it's not certain, and it may not happen by the end of today.