DETROIT (AP) — General Motors announced its second major electric vehicle partnership in less than a week on Tuesday, this time a $2 billion deal with startup Nikola.
GM will take an 11 percent ownership stake in the Phoenix company and will engineer and build Nikola's Badger hydrogen fuel cell and electric pickup truck. The Badger is expected to be in production by the end of 2022.
GM also will help with cost reductions for Nikola's other vehicles including heavy trucks, and the company will use GM's battery system and hydrogen fuel technology.
In exchange for the 10-year deal, GM will get $2 billion worth of Nikola's newly issued common stock that will come in three increments through 2025.
News of the deal sent shares of both companies surging despite a broader-market downturn. Nikola shares were up nearly 38 percent in trading late Tuesday, while GM advanced about 8 percent.
The move sets up GM for a new revenue stream and possibly a change in its business model, essentially becoming a parts supplier to other companies for electric vehicle frames, batteries, controls and components.
GM has been under pressure from Wall Street to more quickly monetize its electric vehicle technology, and industry analysts have suggested spinning off its EV unit as a separate company.
Barra said on a conference call that GM has a "platform that others can use that's going to give us scale and help us drive efficiency." She said the electric vehicle platform and batteries are attractive to other companies, which is a huge opportunity for GM.
"We're going to leverage that and really seize the opportunity that we have to grow," she said.
However, she wouldn't comment on whether GM is in talks with other companies.
Nikola will be responsible for the sales and marketing of the Badger, but it will be built on GM's new battery electric truck underpinnings and use GM fuel cell and battery technology. GM also will supply batteries for other Nikola vehicles including heavy trucks.
GM has its own battery electric truck, a GMC Hummer, due to go on sale a year ahead of the Badger.