09/17/2020

SoFi is committed to fighting racism, standing in solidarity with all of our communities, providing space for open dialogue,
as well as taking action as informed allies. We are donating $1 million to organizations that empower people of color and their allies.

cars in parking lot

Nikola and General Motors Join Forces



A Partnership to Build Light-Duty Trucks

Yesterday, Nikola (NKLA), the electric heavy-duty truck maker, announced a partnership with General Motors (GM). Through this new agreement, GM will engineer and manufacture a light-duty truck from Nikola called the Badger, which will be aimed at individual consumers rather than companies. Production of these trucks is expected to begin by the end of 2022.

Additionally, GM will nominate one person to Nikola’s board of directors and will take an 11% stake in Nikola. This stake is worth about $2 billion.

The Impact on Shares of Nikola and GM

On news of the deal yesterday morning, GM stock rose 6.8% and Nikola stock was up 33%. This surge raised Nikola’s market capitalization by $5 billion, bringing it to about $19 billion. GM’s market value rose about $3 billion on the news.

Year-to-date, Nikola shares climbed by 245% as of Friday’s closing price. GM shares have fallen about 18% year-to-date.

A Win-Win Situation

Nikola and GM see the new partnership as a win-win. Nikola will gain supplier and manufacturing knowledge as well as engineering expertise from GM. It will also help with investor confidence for the EV maker.

GM gets to add another electric product to its offerings, and gains stake in a growing startup. This is not GM’s only move into the EV sphere. A micro electric vehicle developed by GM and partners recently became the most sold EV model in China, surpassing Tesla’s (TSLA) Model 3 sedans in the country.

As the EV industry booms, numerous companies are vying for dominance around the world. Investors will be eager to see if GM and Nikola’s new partnership will help them pull ahead.


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS090902


All your finances.
All in one app.

App Store rating

Download on the App Store Get it on Google Play

ABOUT Kaydee Ambas


TLS 1.2 Encrypted
Equal Housing Lender