Iveco Group and Nikola Corporation announced Tuesday an update to their longstanding joint venture.
The two organizations entered their partnership in 2019 and to date the venture has met all milestones to leverage the respective expertise of both companies to deploy zero-emission heavy-duty trucks in North America and Europe. The two companies worked jointly at a steady pace, despite COVID-19 and supply chain challenges, to achieve the outcomes of the previous phase, launching Battery Electric Vehicles (BEV) and Fuel Cell Electric Vehicles (FCEV) for regional and long haulage.
On Tuesday, the companies stated they are now eager to sharpen their own focus on heavy-duty transport.
Beginning now, Iveco Group will concentrate on Europe for the further development and commercialization of its own battery electric and fuel cell electric trucks, which includes rolling out its financing business model GATE. Nikola will focus its operations in North America, with an integrated approach to its customers, offering BEV, FCEV and hydrogen infrastructure via its HYLA brand.
As such, Iveco Group will assume full ownership of the joint venture in Ulm, Germany. Also, Iveco Group will be licensed to freely access and continue developing 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, technology developed together with Iveco Group's powertrain brand, FPT Industrial.
Iveco Group will cover the capital outlay related to this new phase of collaboration through its available liquidity, acquiring the above-named items partially in cash ($35 million) and partially in Nikola shares (20 million of shares). Despite the negative cash impact generated, Iveco Group states it forecasts to absorb it with cash flow generation and therefore this does not change its cash flow target for 2023; it will also retain a meaningful amount of Nikola shares.Iveco Group and Nikola will continue to work towards the same ultimate goal: to lead the energy transition to the future of mobility.
The above-mentioned provisions are subject to all applicable regulatory approvals and preparation of definitive agreements to more fully implement the terms of the binding terms sheet between the companies, the companies say.