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Technology Stocks : Nikola Corp
NKLA 5.770-10.0%May 16 4:00 PM EDT

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From: kidl10/19/2020 9:03:08 AM
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Nikola defended at JPMorgan with restructured deal with GM called probable

Oct. 19, 2020 8:12 AM ET|About: Nikola Corporation (NKLA)|By: Clark Schultz, SA News Editor

There is still hope for a Nikola (NASDAQ: NKLA) partnership with General Motors (NYSE: GM), according to JPMorgan.

"We believe Nikola and General Motors are still likely to enter into a strategic partnership by December 3rd. Nikola needs access to GM's supply-chain, engineering resource, the Ultium battery and Hydrotec fuel cells to de-risk the Class 8 truck initiative. GM needs to realize a return on billions of dollars of investment in Hydrogen fuel cells, and Nikola might be the best available option. The Badger initiative might be of more interest to GM than the post-Milton Nikola, for whom it seems to be a distraction," notes analyst Paul Coster.

Coster also observes that the Nikola partnership is already promoted by GM as one of six initiatives that constitute the automaker's EV Ecosystem and it is the only named initiative to exploit GM's Hydrotec fuel cell technology.

A probable scenario seen by JP for Nikola is that the deal closes with the original terms or it is re-engineered for a narrower scope that eliminates or downsizes the Badger initiative.

JP keeps an Overweight rating on Nikola.

Last Friday: Nikola -15% on CEO's 'go it alone' comments.
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