Curioser And Curiouser -- The GM-Nikola Story -- September 22, 2020

Updates

Later, 3:05 p.m. CDT: I'm still perplexed. We've gone from ICE to hydrogen in 72 hours? Skipping CNG and EVs, all in one swoop. Pretty amazing. I wonder if GM considered focus groups? Not that focus groups necessarily mean anything -- Steve Jobs famously said his right cortex was his focus group.

Later, 3:02 p.m. CDT: GM news today.

Original Post 

Three mini-bios:CEO on way out, link from Bloomberg below.

CEO on way out:

a high school dropout who parlayed a GED into a college stint that also ended with his dropping out. He then went on to start alarm-system and online-retail ventures and run a natural gas storage-technology company before founding Nikola in 2014. (Yes, Bill Gates and Mark Zuckerberg dropped out of college, too, but not every dropout is a ZuckerGates.)

CEO on way in:

a former GM executive turned dealmaker who originally brought the Nikola transaction to Barra’s attention. He oversaw a $700 million investment in Nikola in March and orchestrated Nikola’s debut as a public company in June by folding it into another publicly traded acquisition vehicle he ran.

Director of Infrastructure:

prior experience looks to have largely consisted of pouring concrete driveways and doing subcontractor work on home renovations in Hawaii.

From Bloomberg op-ed on GM, Nikola, and due diligence. 

[GM CEO Mary] Barra told investors on a conference call last week that GM conducted “appropriate diligence” before entering into a high-profile partnership with Phoenix-based Nikola, a three-year-old publicly traded startup that hopes to mass-produce zero-emission trucks running on hydrogen fuel cells and rechargeable batteries. 

To my ear, “appropriate diligence” is to “due diligence” as “half-baked” is to “fully cooked,” but maybe I’m nitpicking.

By the way, does anyone really know where hydrogen is on the automotive timeline? EVs are here as far as the technology is concerned. Infrastructure, not so much. Sales and market penetration are something else; and profitability is even farther down the road. Hydrogen? I don't know but filming a truck rolling down a hill and passing it off as the future speaks volumes. 

From the op-ed: the reason legacy manufacturers are rushing into EVs and hydrogen: they're tired of paying Elon Musk for regulatory credits. It's buried in this note about the Nikola's new CEO:

If Barra relied heavily on Girsky’s judgment to plow ahead with the GM-Nikola hookup, that may wind up being problematic. After all, Girsky was hardly a passive or objective analyst of Nikola’s prospects. He had skin in the game.

On the other hand, Barra struck a savvy deal, financially. GM received an 11% stake in Nikola, worth about $2 billion when the deal was struck, without putting up any cash. Nikola has to pay GM $700 million to make as many as 50,000 of its electric trucks, and GM gets to pocket the lion’s share of emissions credits earned through sales of those trucks. 

Detroit has also sat around alternately resenting and admiring Tesla Inc.’s ascent without taking enough risky and bold steps on its own to help make electric vehicles a reality. 

Barra’s partnership with Nikola was an important symbolic move, signaling an embrace of innovation and corporate responsibility around climate change.

"Symbolic" does not equate to profitability.

Steve Girsky, bio over at VectoIQ, the penultimate paragraph:

Steve is a currently a director at US Steel Corp and Brookfield Business Partners and a handful of private emerging technology companies. He also served as the lead director of Dana Holdings Corp. from 2008-2009.

An internet search reveals a "Steve Girsky" associated with a number of "emerging technology companies," but whether this is the same "Steve Girsky is not said. 

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GM, Ultium, And All That Jazz

To be explored later, perhaps:

• let's not lie: GM's new Ultium battery is not better than Teslas; insideEVs, March 13, 2020;
• luxury cars: Hummer and Cadillac will be among the first to get Ultium drive units and batteries, autoweek, September 18, 2020;
• Elon Musk's chance to fend off competition from GM's "novel: Ultium design, businessinsider, September 22, 2020;