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GM CEO Mary Barra. Photo: Bill Pugliano/Getty Images

General Motors is taking an 11% stake in the electric vehicle startup Nikola Corp. and will manufacture its planned Badger pickup truck, the companies said Tuesday.

Why it matters: It's the latest vote of confidence for Nikola, which is among a number of startups that have been attracting significant capital and investor interest before making any profits or vehicles.

  • It also shows how legacy automakers are increasingly teaming up with startups as they position themselves to compete in emerging electrified transport markets.

The impact: Nikola, which is planning both the pickup and a line of semi trucks, was up 32% in pre-market trading, while GM was up 7%.

The big picture: GM will receive a $2 billion equity stake in Nikola and will become a key technology supplier for the startup.

  • "Nikola will utilize General Motors' Ultium battery system and Hydrotec fuel cell technology," the companies said.
  • GM will be the "exclusive supplier" of fuel cells (outside of Europe) for the semi trucks Nikola is planning.

What they're saying: The companies said the "strategic partnership" will yield financial benefits for both companies.

  • Nikola, which went public in June, said it expects to save over $4 billion in battery and powertrain costs over a decade.
  • GM, meanwhile, expects to see over $4 billion in benefits via the value of its shares in Nikola, the contract for manufacturing the Badger pickup, contracts for batteries and fuel cells, and more.

Editor's note: This headline has been changed to reflect that GM received an 11% stake in Nikola as part of their technology sharing agreement, but did not pay the startup any money for the shares.

Go deeper

Ben Geman, author of Generate
Nov 22, 2019 - Technology

Tesla ushers in the electric pickup moment

Photo: Tesla

Tesla unveiled its futuristic "Cybertruck" at an L.A. event on Thursday that was heavy on light shows, yet analysts remain in the dark about the future of electric pickups — and Tesla's role in it.

Why it matters: The event was the splashiest sign yesterday that automakers are moving closer to bringing electric models to the huge pickup market.

Biden picks Warren allies to lead SEC, CFPB

Photo: Justin Sullivan/Getty Images

President-elect Joe Biden has selected FTC commissioner Rohit Chopra to be the next director of the Consumer Financial Protection Bureau (CFPB) and Obama-era Wall Street regulator Gary Gensler to lead the Securities and Exchange Commission (SEC).

Why it matters: Both picks are progressive allies of Sen. Elizabeth Warren (D-Mass.) and viewed as likely to take aggressive steps to regulate big business.

The perils of organizing underground

Illustration: Aïda Amer/Axios

Researchers see one bright spot as far-right extremists turn to private and encrypted online platforms: Friction.

Between the lines: For fringe organizers, those platforms may provide more security than open social networks, but they make it harder to recruit new members.