RIP, Nikola Badger – Milton’s Tesla Troll Gets Trolled
By Edward A. Sanchez – Dec. 2, 2020
The Nikola Badger pickup, former Nikola CEO Trevor Milton’s CGI-based troll of the Tesla Cybertruck, has been trolled itself, with General Motors’ revised partnership deal with Nikola effectively killing the light-duty pickup project. While some may be shocked at this turn of events, if you’ve followed my posts on TWC, you’ll know that I’m not at all. From day one, I’ve called out Milton specifically and Nikola broadly as being self-promoting hucksters that skillfully built a Potemkin Village around cobbled-together prototypes that have subsequently been shown to be non-functional, literally plugged in to an extension cord in one case, and coasting down a hill in another.
Nikola may have some valuable intellectual property and employees left with the company, but I can’t help but think after the latest turn of events, the company is essentially a “dead man walking.” So what’s left at this point? Both Nikola and GM released similar, but not identical statements surrounding the revised MOU (Memorandum of Understanding) between the two companies. The revised terms definitely don’t bode well for Nikola’s future.
From Nikola’s official release:
“Under the terms of the MOU, Nikola and GM will work together to integrate GM’s Hydrotec fuel-cell technology into Nikola’s Class 7 and Class 8 zero-emission semi-trucks for the medium- and long-haul trucking sectors. As previously announced, Nikola expects to begin testing production-engineered prototypes of its hydrogen fuel-cell powered trucks by the end of 2021, with testing for the beta prototypes expected to begin in the first half of 2022. In addition, Nikola and GM will discuss the potential for the utilization of GM’s versatile Ultium battery system in Nikola’s Class 7 and Class 8 vehicles.”
Also from Nikola’s release:
“The MOU does not include the previously contemplated GM equity stake in Nikola or development of the Nikola Badger. As previously announced, the Nikola Badger program was dependent on an OEM partnership. Nikola will refund all previously submitted order deposits for the Nikola Badger.”
From GM’s release:
“Under the potential agreement referenced in the MoU, GM would engineer its Hydrotec fuel cell system to the specifications mutually agreed upon by both companies. GM and Nikola will discuss the appropriate scope of services that GM would provide for the integration of the fuel cell system into Nikola’s vehicles. It is expected that the potential arrangement would be cost plus, and that Nikola would pay upfront for the capital investment for the capacity. GM and Nikola will also discuss the potential of a supply agreement for GM’s versatile Ultium battery system for Nikola’s Class 7/8 trucks.”
The way I’m reading it is that GM is washing its hands of whatever mess it had with Nikola, and basically entering into a strictly supplier relationship. Smart on GM’s part, not so great for Nikola. Not only does the startup not get any equity stake from GM, but GM is also requiring the company to pay up-front for GM’s fuel cell development work.
Nikola’s hydrogen-powered big truck offerings are still slated for development, although the agreement with GM has altered greatly.
I don’t want to keep beating a dead horse, but again, developing, engineering, building, and selling cars and trucks is a tough business, and takes more than just flashy presentations and press conferences, and bombastic, braggadocious press releases and Tweets. Nikola may yet emerge from this latest chapter as a viable player in the Class 7-8 truck market, or as a hydrogen infrastructure network operator. But I’d say it’s about 50/50 odds that the company could also wind down and liquidate whatever threadbare assets it currently has.
There are numerous other startups in the EV and “new energy transportation” space, including Lucid, Lordstown, Rivian, Fisker, and others. Reliance on partnerships in the early days is not necessarily a dishonorable or bad strategy. However, at some point, there has to be a “there” there. Nikola may eventually get “there” but definitely isn’t there yet, and with GM effectively pulling the rug out from under its feet, getting to that destination just got a lot harder.
(Images courtesy Nikola)
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