Nikola Shares Plunge After CEO Says Startup Can Go It Alone

(Bloomberg) - The shares of Nikola Corp. declined up to 16% on Friday after the electric vehicle startup's CEO said he saw a path for his company to take, even if he couldn't come to terms with General Motors Co. for a proposed strategic partnership.
Talks between the two companies continue, but if a tentative technology-sharing and manufacturing contract announced last month falls apart, Nikola will revert to a "baseline" without GM's help, CEO Mark Russell said in an interview on April 13th late thursday.
“We have the ability and we have a basic plan to do this ourselves. When we have a partner, the only thing we can do is think about going faster and reducing the risk, ”he said. "We have proven over the years that we are a partner when these things are available to us."
The Phoenix-based company's relationship with its potential partner has been scrutinized as Nikola and its founder and former chairman Trevor Milton were accused of fraud. Both the company and Milton have denied these claims.
Read more: Nikola's story of the discrepancies was in sight
GM is seeking an 11% stake in Nikola through a cashless deal to provide access to fuel cell technology and manufacture the startup's electric pickup. Nikola has stopped referring to this badger vehicle in his public statements as talks with GM will resume before December 3rd.
According to Russell, Nikola is ready to drop the truck if an agreement cannot be reached with an original equipment manufacturer like GM.
“The badger is part of our discussions with GM. And it was clear to us all along that we wouldn't build a badger without an OEM partner, ”he said.
When asked if GM's revamped Detroit-Hamtramck facility will build the Nikola Badger alongside a proposed Hummer electric pickup truck, Gerald Johnson, GM's executive vice president of global manufacturing, said both sides are still negotiating.
"We haven't closed a deal yet," said Johnson on Friday. "We're working on the details."
The Detroit-based automaker could push to increase its proposed stake in Nikola or look for warrants to guarantee or increase its equity as the company raises more cash, according to people recently familiar with the matter.
Nikola shares trimmed their earlier decline, falling 14% to $ 20.07 from 1:50 p.m. in New York. The stock is down more than 70% from a high of $ 79.73 in early June, shortly after the company gained a public listing through a reverse merger.
According to Bloomberg, Nikola has also had talks with major oil company BP Plc about building a network of hydrogen filling stations across North America. The status of these talks is unclear, but the company has announced that it will announce a partner by the end of the year.
Russell reconfirmed this schedule and declined to comment on BP or to indicate any other potential partner. But he also said Nikola had a plan to develop the hydrogen infrastructure himself if it wasn't possible to forge a suitable alliance.
Nikola has agreements with other technology providers, including a partnership with Robert Bosch GmbH to jointly develop fuel cell technology. Two of the startup's heavy truck prototypes use fuel cells from Bosch. The company has announced that its larger German partner will continue to supply cells for vehicles produced in Europe.
Nikola is also working on a battery-electric semitrailer truck to be built next year in Ulm in a joint venture with the Iveco unit of CNH Industrial NV. Ultimately, plans to manufacture a large fuel cell powered drill rig at his own facility in Coolidge, Arizona, which is under construction.
(Updates with comments from GM Executive from paragraph eight.)
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