What’s Happening
Iveco Group N.V. and Nikola Corporation are entering a new phase of their partnership, which began in 2019. The partnership aims to leverage each company’s expertise in order to deploy zero-emission heavy-duty (Class 8) trucks in North America and Europe. Despite Covid-19 and supply chain challenges, the two companies successfully launched Battery Electric Vehicles (BEV) and Fuel Cell Electric Vehicles (FCEV) for regional and long haulage.
Why It Matters
With the transportation sector being a significant contributor to greenhouse gas emissions, the development and deployment of zero-emission heavy-duty trucks is crucial for addressing climate change. Iveco Group and Nikola’s joint efforts will lead to greener transportation options for regional and long-haul operations, helping to reduce overall emissions and accelerate the transition to clean energy.
Key Points
- Each company will focus on heavy-duty transport in their respective regions. Iveco Group will concentrate on Europe for further development and commercialization of its own battery electric and fuel cell electric trucks, including the rollout of its financing business model GATE. Nikola will focus on North America, offering BEV, FCEV, and hydrogen infrastructure via its HYLA brand.
- Iveco Group will assume full ownership of the joint venture in Ulm, Germany and will be licensed to access and develop vehicle control software for the jointly developed BEV and FCEV. Nikola will be granted the IVECO S-Way technology license for North America and related component supply from Iveco Group, and will gain joint ownership of the intellectual property of Generation 1 eAxles, developed with Iveco Group’s powertrain brand, FPT Industrial.
- Iveco Group will cover the capital outlay related to this new phase through its available liquidity, acquiring the mentioned assets partially in cash (USD 35 million) and partially in Nikola shares (20 million shares). Despite the negative cash impact, Iveco Group expects to absorb it with cash flow generation and will retain a significant amount of Nikola shares.
Bottom Line
Iveco Group and Nikola are refocusing their partnership to strengthen their commitment to the development and deployment of zero-emission heavy-duty trucks. This strategic move will allow each company to concentrate on their respective markets, promoting cleaner transportation options and leading the energy transition in the future of mobility. The provisions are subject to regulatory approvals and the preparation of definitive agreements to implement the terms of the binding terms sheet between the companies.
