Shares of embattled electric vehicle start-up Nikola jumped by almost 12% during premarket trading Wednesday after a General Motors executive said the automaker still sees a tie-up with the company being a great opportunity.
GM President Mark Reuss said the automaker continues “to work the opportunity” of its $2 billion deal with Nikola that was announced last month but hasn’t yet been finalized.
“The opportunity to put our fuel cells into a class 7 and 8 vehicle is spectacular,” he said on CNBC’s “Squawk Box.” “We know there’s great operational cost advantages there, there’s great efficiencies and there’s great opportunities.”
The comments were some of the first from a GM executive about the deal after the two sides postponed the expected close of the transaction last month.
Shares of GM rose by more than 2% during premarket trading. After the markets opened, Nikola’s stock was up more than 7% while GM’s was down around 1%.
The Sept. 8 deal was initially viewed as a no-lose situation for GM. The partnership would give the Detroit automaker an 11% stake in the company for supplying Nikola battery and fuel cell technologies as well as producing Nikola’s Badger pickup.
It was expected to close before Sept. 30 but the talks became convoluted following fraud allegations against Nikola and its founder, Trevor Milton, who resigned as the company’s executive chairman on Sept. 21. Since then, two women also have now filed sexual assault claims with Utah authorities against Milton. The controversy has cut the company’s share price in half.
The deal may be terminated by either side if it’s not closed by Dec. 3, according to a public filing by Nikola when the partnership was announced.