Shares of Tesla's of budding competitor Nikola are surging by as much as 50% Tuesday after announcing a partnership deal with General Motors.
As part of the deal, General Motors will receive a $2 billion equity stake in Nikola and will "engineer, validate, homologate and build the Nikola Badger for both the battery electric vehicle and fuel cell electric vehicle variants as part of the in-kind services," according to a Tuesday morning press release.
"Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn't dream of a better partnership than this," Nikola CEO Trevor Milton said.
Nikola also touted that the partnership would result in significant cost savings for them, since they will be using General Motors' Ultium battery system and Hydrotec fuel cell technology.
Nikola will issue $2 billion in new stock for General Motors, where it will be locked up until June of 2025.
GM CEO Mary Barra chimed in:
"This strategic partnership with Nikola, an industry leading disrupter, continues the broader deployment of General Motors' all-new Ultium battery and Hydrotec fuel cell systems. We are growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability."