GM’s blockbuster deal to buy 11% of Nikola and make the startup’s electric trucks, will not close today as scheduled, over turmoil that has erupted over allegations of fraud at Nikola.
The agreement, announced earlier this month, had been a coup for Nikola, a come-from-nowhere startup that had never made a single vehicle but is valued at more than $6.7 billion. The deal began to get shaky after a short-seller’s report alleged fraud at Nikola, and on September 21 the startup’s founder, Trevor Milton, resigned.
In a statement, GM said it is in discussions with Nikola, adding, “In light of recent allegations regarding the personal behavior of Nikola’s former executive chairman, Trevor Milton, we want to emphasize that GM strongly condemns sexual harassment and abuse of any kind.” Nikola said it continues to work toward closing the deal.
As we wrote when the original news first broke, the deal was a sign of insecurity within GM, which has developed some of the industry’s most cutting-edge electric technology, yet found itself as a stage hand for a hyped, unproven, new startup.