Shares of Nikola surged Tuesday after General Motors announced that it's taking an 11% stake in the electric truck maker and will produce its marquee hydrogen fuel cell electric pickup truck the Badger by the end of 2022.
Nikola's shares jumped by about 45% in premarket trading while GM jumped by almost 9%.
GM is getting a $2 billion stake in Nikola and the right to nominate one board member in exchange for in-kind services. GM will also become the exclusive supplier of fuel cells globally outside of Europe to Nikola for its class 7/8 truck. Nikola makes battery-electric and hydrogen-powered trucks.
"When we look at the opportunity to continue to leverage our technology -- the Ultium battery platform system as well as the Hydrotec fuel cell technology -- this is a wonderful validation of our technology, and then bringing our engineering and manufacturing expertise to the table," GM CEO Mary Barra said in an interview on CNBC's "Squawk Box."
Nikola founder and Executive Chairman Trevor Milton said the partnership gives Nikola access to GM's validated parts as well as its Ultium battery technology and a multibillion dollar fuel cell program.
"Nikola immediately gets decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering and investor confidence," Milton said in a statement. "Most importantly, General Motors has a vested interest to see Nikola succeed."
Nikola began trading June 4 after a reverse merger with VectoIQ, which is a publicly-traded special purpose acquisition company headed by former vice chairman of GM Stephen Girsky. The stock has taken off since its IPO despite the fact that Nikola, which was founded in 2015, doesn't expect to generate revenue until 2021, and shows the dispensation investors are willing to give to companies that promise vehicles of the future.
CNBC's Kevin Stankiewicz contributed to this article.
This story is breaking. Come back for updates.
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