After General Motors Co announced on Tuesday that it is acquiring an 11% stake in U.S. electric truck maker Nikola Corp. Stake worths about $2 billion, and will team up with the company to make a pick-up truck. The alliance with Nikola is the second major deal in a week for GM and highlights the pressures faced by the auto industry to share costs to meet demands for cleaner vehicles.
General Motors will receive $2 billion in newly issued Nikola stock and also the right to nominate one director to the electric truck maker's board. It expects to receive benefits in excess of $4 billion between equity value of shares. Both companies project to save $4 billion in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs.