Exactly. There is literally no downside for GM.
If it's a total scam and falls apart tomorrow, well - they didn't pay any money for the deal (aside from lawyer time). Oh well.
If they can sell off their stock grant, that's free money.
If they can actually make parts/vehicles for Nikola, that's even more money.
We're going to find out over the next few weeks that isn't the case. There is tremendous reputational risk here. This episode could throw into question EV capabilities for GM for years to come.
Don't be surprised to see heads roll all the way up in the C-suite at GM over this.
Nobody else is paying serious attention to the R&D ventures of the big automakers or at least if they are they aren't using it to influence purchasing decisions.
> In some cases, yes.
Now I'm curious. Can you give an example?
This[1] is a pretty good overview to piercing the corporate veil. I suppose it's technically possible for a company to be liable for what a company they invest in does, but there would have to be some pretty weird circumstances (for example, if the two companies had substantially co-mingled finances and leadership).
I don't see any of it applying to the GM/Nikola deal.
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1. https://www.nolo.com/legal-encyclopedia/personal-liability-p...
When it was just Tesla it was fine for them to be bad at making EV. Now that VW and others are starting to get serious, they really need to make something happen.
Say what you will about Musk and Tesla (I know, I know), but their Class 8 Semi did a nationwide tour (under its own power) to potential customers [1] and also occasionally pitches in to perform vehicle deliveries [2], no downhill coasting required.
[1] https://electrek.co/2018/08/25/tesla-semi-drove-across-count...
[2] https://electrek.co/2020/06/26/tesla-semi-spotted-used-deliv...
In the current situation, all investors will require substantial proof of working technology. No working tech, no new investment, the company will probably fold before paying back a cent to GM.
https://www.businessinsider.com/spac-biggest-blank-check-dea...
The best hospitals are likely in California. Doctors want to work in California so bad that they actually take LESS money. It's called the sunshine tax.
Of course it turned out to be a scam.
Group think and greed are powerful drugs for those unable to perform their own critical thinking/research.
If Nikola is an unexpected success, then they have a significant stake in it, and if they fail, then hopefully they don't have too many vehicles that Nikola hasn't paid for.
GM can definitely build a good electric vehicle. They cannot seem to market a good electric vehicle—see Chevrolet Bolt sales, and then ask a random person if they know what a Bolt is. So the Nikola investment is the equivalent of buying a hip design studio?
In the worst case, they were paid to do their own R&D.
Nikola basically bribed GM with a insane deal so they can say they have a GM partnership.