General Motors (GM) is already annoyed with the troubled car manufacturer Nikola. The company announced that it is giving up its capital share in the start-up, which produces electric and hydrogen trucks.
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Nikola’s shares fell more than 26 percent after the news was released. According to CNBC server along with stock prices, plans for the commercial production of Nikola Badger’s pick-up also fell. GM shares also fell, by about one percent.
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In September, the two carmakers announced that they had signed an agreement that secured GM an 11 percent stake worth two billion dollars. At that time, the companies also agreed to start production of an electric and hydrogen-powered Badger pick-up by the end of 2022.
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It was said about the agreement that GM could not lose anything with it. The opposite proved true when Hindenburg Research accused Nikola and its founder Trevor Milton, who resigned as CEO in September, of fraud.
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A report by Hindenburg Research claimed that Nikola’s hydrogen tractor was a hoax. Nikola published a video where she allegedly dropped her hydrogen-powered car only downhill. Hindenburg also accused Milton of lying, manipulating, inaccurately and untruthful to investors.
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Carmakers Nikola and GM have said they are currently still debating whether GM Nikola will supply battery systems for their planned electric vehicles.
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Nikola said she would return all orders sent for the Badger car, as its production depended on GM’s external partner. It was GM that Badger was to produce for Nikola.
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The carmaker began negotiating with Nikola before doubts emerged about how far the company was in developing its tractors. But now that GM has abandoned the contract and it is still unclear what technology the start-up has at its disposal, it is possible that at first glance, the promising Nikola project will not be realized.
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Hindenburg Research’s allegations led the company to be investigated by the Department of Justice and the Securities and Exchange Commission. Nikola said she was working with them.
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