What happened
Shares of electric-truck start-up Nikola (NKLA +0.00%) opened higher on Wednesday, after a General Motors (GM 3.33%) executive praised the company and said that partnership negotiations are still underway.
As of 10:30 a.m. EDT, Nikola's shares were up about 9.4% from Tuesday's closing price.
So what
In an interview with CNBC on Wednesday morning, GM president Mark Reuss said that his company is continuing to "work the opportunity" of a partnership with Nikola.
The two companies announced on Sept. 8 that GM would provide Nikola with batteries and fuel cells for its heavy trucks, and that it would engineer and build Nikola's Badger electric pickup, in exchange for a $2 billion stake. But Nikola's stock has since fallen by roughly half after a short-seller alleged that the company had misled investors, throwing the deal into question.
GM's president said that a deal with Nikola offers a great opportunity to bring the company's fuel cells, developed with Honda, to market in heavy trucks. Image source: Nikola.
Auto investors have seen the GM deal as key to Nikola's growth plan, particularly in the wake of the short-seller's allegations and the related departure of the company's founder, Trevor Milton. Reuss' comments raised hopes that a deal will be completed by GM's Dec. 3 deadline; that's why Nikola's stock opened higher today.
Now what
Reuss said that Nikola offers GM an excellent opportunity to put its fuel cells, developed in a joint venture with Honda Motor, into heavy Class 7 and Class 8 trucks. The deal would give the GM-Honda venture added scale and could provide extensive data once Nikola's trucks are on the road.
In a separate interview with Bloomberg, Reuss said that Nikola's Badger will have a different powertrain from the one that GM will use in its Hummer electric pickup, revealed by GM on Tuesday night. While the Badger is expected to combine batteries with a hydrogen fuel cell, the GMC Hummer EV will debut in the fall of 2021 with a 1,000 horsepower, three-motor battery-electric drive system, GM said on Tuesday.
