Nikola, tumbled on Friday, extending its month-long decline after the electric car maker CEO Mark Russell told Bloomberg in an interview that the electric vehicle startup would work alone if its announced deal with General Motors falls apart.
Nikola is in ongoing talks with GM with a December 3 deadline set to make a deal. Russel said that Nikola has a “base plan” if the deal with General Motors is off,
Shares fell as much as 16.12% on Friday to close at $19.55 per share. Nikola soared to as high as $93.99 per share on 6 September. The stock has fallen over 50% since Hindenburg Research released a short report accusing the company of fraud, deception, and misleading investors in late September, which led to the resignation of its founder Trevor Milton.
In the proposed deal, General Motors would be tasked with manufacturing Nikola’s electric pickup truck, the Badger. But Russell said the company is prepared to abandon the Badger pickup truck if it is unable to strike a deal with an OEM partner, according to the Bloomberg interview.
“The Badger is part of our discussions with GM. And we’ve been clear all along that we wouldn’t build a Badger without an OEM partner,” Russell said.
“We have the ability and we have a base plan of doing it ourselves. If we have a partner, that just enables us to consider going faster and helps reduce the risk,” Russell told Bloomberg.
Still, a deal with General Motors is still possible. General Motors could seek an increased stake in Nikola given its now depressed valuation since the original deal was announced last month. Another option is for General Motors to receive warrants on Nikola, according to Business Insider.
Russell said Nikola is still targeting a deal by year-end with an energy company with respect to its ambition for a Hydrogen refueling station. It was reported that the electric car maker held talks with BP. Although the talks were put on hold following the negative impact of the Hindenburg report. He also said that Nikola will plan to develop its own Hydrogen refueling station if no deal was agreed.
About Nikola Corporation
Nikola Corporation is globally transforming the transportation industry. As a designer and manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen station infrastructure, Nikola is driven to revolutionize the economic and environmental impact of commerce as we know it today. Founded in 2015, Nikola Corporation is headquartered in Phoenix, Arizona.
By; Ifunanya Ikueze