General Motors is considering revisions to its deal with embattled Nikola, according to people familiar with the discussions, and may seek a higher stake in the startup now that its valuation has fallen after allegations of deception.
GM tentatively agreed to take an 11% stake in Nikola as part of a cash-free deal made public last month. The Detroit carmaker would supply hydrogen fuel-cell technology to its junior partner and manufacture a new battery-powered pickup for it called the Badger.
Talks to finalize the agreement are ongoing ahead of a December 3 deadline.
Since the announcement of the deal on September 8, Nikola stock has fallen by more than half and GM has sought better terms before closing. GM could potentially push to raise its equity in Nikola beyond the planned 11% or seek warrants that would guarantee or even increase that level of ownership if the company raises more money.
Gm’s due diligence on the startup has been questioned after a short seller accused Nikola of overstating its capabilities and know-how. The allegations sent the Phoenix-based company’s stock price into a downward spiral. However, Nikola has denied these allegations against it.
