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

Sep 25, 2020 - Economy & Business

Recurrent aims to help buyers get a better idea of battery life in a used electric vehicle

2011 Nissan Leaf. Photo: Nissan

Recurrent, a new Seattle-based startup, aims to answer the most commonly asked question by people considering a used electric vehicle: "How much battery life is left?"

Why it matters: You can get a decent idea of how long a traditional used car will last by knowing how many miles are on the odometer. But longevity in an electric vehicle is harder to predict and depends on many factors, including how and where the vehicle was driven and the battery's charging history.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 8 a.m. ET: 33,396,784 — Total deaths: 1,002,628 — Total recoveries: 23,182,295Map.
  2. U.S.: Total confirmed cases as of 8 a.m. ET: 7,150,117 — Total deaths: 205,091 — Total recoveries: 2,794,608 — Total tests: 102,342,416Map.
  3. Business: Companies are still holding back earnings guidance.
  4. Health: Trump announces plan to distribute 150 million rapid tests —The childless vaccine.
  5. Media: Fauci: Some of what Fox News reports about COVID-19 is "outlandish"
  6. States: Cuomo extends New York moratorium on evictions until 2021.
  7. World: More than 1 million people have now died from coronavirus — India the second country after U.S. to hit 6 million cases.