GM entered a tentative agreement with Nikola in September to exchange an 11% stake in the start-up for access to its electric and hydrogen vehicle technology. GM also agreed to engineer and build the new Nikola Badger electric pickup truck on behalf of the company, with Nikola only responsible for the marketing and sales for the truck.
Nikola’s stock is now worth less than half of what it was in early September, prompting GM to seek a bigger stake in the company in exchange for its in-kind services, Bloomberg reports. The Detroit-based automaker could also be seeking an authorization that would guarantee a certain level of ownership in Nikola or increase its existing stake if it were to raise more money from outside investors, the publication said.
Nikola shares fell sharply after a short-seller report accused the company of misleading investors by lying about or exaggerating the capabilities of its electric vehicle technology. The company eventually admitted to staging a video that showed its Nikola One semi-truck moving under its own power, with company founder Trevor Milton resigning shortly after. Milton has since had two formal sexual assault complaints filed against him, though the billionaire has denied the accusations.
Despite the controversy surrounding the company, GM has said that it still wants to go through with the deal. Bosch, another key Nikola partner, has also decided to stick with the company, with a spokesperson telling Reuters last month that it remains “in close contact with the company and its management,” as they continue to work together.
Nikola postponed a December event called “Nikola World” this week, in which it planned to debut the first real-world Nikola Badger prototype. The company blamed COVID-19 concerns for the change, though the recent controversy surrounding the company likely played a major factor as well.