(Reuters) – General Motors Co (GM.N) said on Tuesday it was acquiring an 11% stake in U.S. electric truck maker Nikola Corp NKLA.O, worth about $2 billion, and will team up with the nascent company to make a pick-up truck powered by a battery-electric system and or fuel cell variants.
Shares of Nikola, which competes with Tesla Inc’s (TSLA.O) Cybertruck, soared more than 30% to $46.30 in pre-market trade.
General Motors will receive $2 billion in newly issued Nikola stock and will get a right to nominate one director to the electric truck maker’s board.
As a manufacturing partner, the No.1 U.S. automaker said it will build the Nikola Badger with either an electric battery or fuel cell electric variants. Production is expected by year-end 2022, and will have lower costs across other models.
GM expects to receive benefits in excess of $4 billion between equity value of shares, contract manufacturing of the Badger, among other perks as part of the agreement.
The companies expect to save $4 billion in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs.