General Motors will not take an initial stake in the electric vehicle company Nikola, which announced Monday that it would scuttle on of its marquee vehicles, an electric and hydrogen-powered pickup that was to be called the Badger.
Shares of Nikola plunged 21% at the opening bell.
Nikola on Monday released updated terms between the companies for a supply agreement related to GM's fuel-cell system , replacing an agreement signed in September. That deal would have given GM an 11% stake in Nikola.
That agreement would have allowed Nikola to use GM’s new battery electric truck underpinnings for the Badger, and also GM's fuel cell and battery technology. GM had agreed to supply batteries for other Nikola vehicles including heavy trucks.
The deal appeared to be in jeopardy in late September GM cast doubt on whether a $2 billion partnership would close as scheduled, saying that the deal has not closed and discussions with Nikola are continuing.
That announcement came just days after Nikola founder and Chairman Trevor Milton resigned after a Hindenburg Research, a company that’s betting Nikola stock will drop, accused Nikola of Fraud. Nikola denies the allegations and called them misleading.
Hindenburg said Nikola’s success was an “intricate fraud,” including a video showing a truck rolling downhill to give the impression it was cruising on a highway, and stenciling the words “hydrogen electric” on the side of a vehicle that was actually powered by natural gas.
The Securities and Exchange Commission and the Justice Department are reportedly investigating. GM has said it did proper due diligence before entering the partnership.
Nikola said Monday that its work on heavy trucks will continue.
“Heavy trucks remain our core business and we are 100% focused on hitting our development milestones to bring clean hydrogen and battery-electric commercial trucks to market," said CEO Mark Russell.