General Motors and Nikola announced a revamped and smaller deal that keeps the fuel cell partnership intact.
The new agreement decreases GM’s stake in the start-up, as well as plans to build Nikola’s electric truck, Badger.
Nikola’s Shares plummeted with the news.
Nikola’s shares plunged more than 27% in Monday morning’s trading after General Motors announced it is giving up a stake in the electric truck start-up and the two said they are abandoning plans to build Badger , Nikola’s pickup for consumers.
In September, automakers announced a $ 2 billion deal that gave GM an 11% stake in Nikola to supply batteries and fuel cell technologies, as well as produce the Badger pickup.
Negotiations became complicated after short seller Hindenburg Research launched fraud charges against Nikola and its founder, Trevor Milton, who resigned as chief executive on September 21.
Nikola’s shares initially rose with the news in the pre-market trading on Monday, before plummeting. As of 10:52, Nikola’s shares fell about 26% to $ 20.78. GM shares fell 2.2% to $ 44.09 per share.
The companies said they continue to discuss GM’s potential to supply Nikola battery systems for its planned electric semi-trucks.
Nikola said he will reimburse all order deposits previously sent to Badger, which depended on an external partner, such as GM, to build it.
The short seller’s allegations were published two days after the GM deal was announced. They led to investigations into the company by the Department of Justice and the Securities and Exchange Commission. Nikola said he is “fully cooperating” with the agencies.