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% 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 three increments through 2025.
News of the deal sent shares of both companies surging despite a broader-market downturn. Nikola was up nearly 50% in Tuesday afternoon trading, while GM advanced more than 9%.