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A comment on Nikola admits prototype was rolling downhill in promotional video. Parent comment

Re:Nikola admits prototype was rolling downhill in promotion... by mafuyu on Monday September 14, 2020 @02:31PM (#24473452)
It was such a good deal for GM that it didn't matter. They got 11% of Nikola, which they can start selling off after a year. And that was just to allow Nikola access to their IP, which GM wanted to develop and test anyways. I imagine they got such great terms because Nikola has absolutely nothing working in-house.
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Re:Nikola admits prototype was rolling downhill in promotion... by nordsieck on Monday September 14, 2020 @04:23PM (#24474688)
> It was such a good deal for GM that it didn't matter.

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.

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Re:Nikola admits prototype was rolling downhill in promotion... by blantonl on Monday September 14, 2020 @08:01PM (#24476525)
Exactly. There is literally no downside for GM.

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.

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Re:Nikola admits prototype was rolling downhill in promotion... by throwaway0a5e on Monday September 14, 2020 @08:20PM (#24476614)
Reputational risk among who? The upper middle class people who poo-poo anyone who doesn't drive a Toyota or Tesla product?

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.

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Re:Nikola admits prototype was rolling downhill in promotion... by wasdfff on Tuesday September 15, 2020 @11:29AM (#24482351)
Seriously, this is auto/tech nerd news which is read by a sliver of car buyers. Folks will stroll into the dealership they bought their last GM 15 years ago and say ‘gee maybe ill give electric a shot for these lease terms considering my use lately.’
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Re:Nikola admits prototype was rolling downhill in promotion... by samfisher83 on Monday September 14, 2020 @07:31PM (#24476330)
Until they get sued. Many of the people who made money of Madoff had to return the money they gained.
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Re:Nikola admits prototype was rolling downhill in promotion... by hatsunearu on Monday September 14, 2020 @07:56PM (#24476490)
You're saying an investor (GM) can be held liable for what the limited liability corporation (Nikolai) did?
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Re:Nikola admits prototype was rolling downhill in promotion... by ric2b on Wednesday September 16, 2020 @05:02PM (#24497859)
Not necessarily held liable, but they'd probably have to return the money if it was earned from illegal activity.
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Re:Nikola admits prototype was rolling downhill in promotion... by hobby-coder-guy on Monday September 14, 2020 @08:16PM (#24476602)
In some cases, yes.
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Re:Nikola admits prototype was rolling downhill in promotion... by nordsieck on Monday September 14, 2020 @08:18PM (#24476610)
>> You're saying an investor (GM) can be held liable for what the limited liability corporation (Nikolai) did?

> 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.

___

1. https://www.nolo.com/legal-encyclopedia/personal-liability-p...

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Re:Nikola admits prototype was rolling downhill in promotion... by nickik on Monday September 14, 2020 @05:07PM (#24475162)
Every engineer that works on working with Nikola is not working on trying to catch up in EV.

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.

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Re:Nikola admits prototype was rolling downhill in promotion... by freewilly1040 on Monday September 14, 2020 @07:34PM (#24476357)
They've rented out their reputation to further this scam. That reputation is now damaged.
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Re:Nikola admits prototype was rolling downhill in promotion... by nradov on Monday September 14, 2020 @07:37PM (#24476376)
Perhaps, but it's hard to imagine a typical GM customer giving a damn about this investment.
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Re:Nikola admits prototype was rolling downhill in promotion... by toomuchtodo on Monday September 14, 2020 @02:47PM (#24473625)
11% of 0 is 0. This simply solidifies the idea that GM is led by out of touch legacy management. "We were supposed to check they only rolled the truck down a hill?"

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...

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Re:Nikola admits prototype was rolling downhill in promotion... by 112012123 on Monday September 14, 2020 @03:11PM (#24473900)
In addition to the 11%, GM is also slated to earn up to 700 million dollars in cash.
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Re:Nikola admits prototype was rolling downhill in promotion... by yholio on Monday September 14, 2020 @03:46PM (#24474282)
More specifically was slated to earn 700 million, if the Nikola ponzi had been able to slip under the radar and continue. I'm absolutely sure NKLA does not have 0.7 billion lying around in cash, those are new investment that they need to raise. Fake it till you make it, they say.

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.

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Re:Nikola admits prototype was rolling downhill in promotion... by easde on Monday September 14, 2020 @03:59PM (#24474435)
As of their last earnings report Nikola had almost exactly $700M in cash / cash equivalents. Maybe GM just wants that :)
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Re:Nikola admits prototype was rolling downhill in promotion... by yholio on Monday September 14, 2020 @04:15PM (#24474607)
That's interesting. Without any product, what exactly are those sources of cash earnings?
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Re:Nikola admits prototype was rolling downhill in promotion... by toomuchtodo on Monday September 14, 2020 @04:45PM (#24474935)
Reverse merger with a SPAC investment vehicle. They're not earnings, they're investor funds.

https://www.businessinsider.com/spac-biggest-blank-check-dea...

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Re:Nikola admits prototype was rolling downhill in promotion... by nickik on Monday September 14, 2020 @05:07PM (#24475172)
They need that for the next 3 years where they will not make money.
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Re:Nikola admits prototype was rolling downhill in promotion... by coolspot on Monday September 14, 2020 @03:21PM (#24474019)
They probably can sell calls against those shares, basically getting risk-free money regardless of NKLA price in future.
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Re:Nikola admits prototype was rolling downhill in promotion... by mrep on Tuesday September 15, 2020 @07:57AM (#24480185)
Doubt it because if it got exercised they would be selling their stock. Otherwise, they just be able to sell daily calls at 1 cent below the price for no premium and watch it exercise and thus liquidating the stock they are supposed to hold onto.
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Re:Nikola admits prototype was rolling downhill in promotion... by pfisch on Monday September 14, 2020 @07:39PM (#24476390)
If GM didn't know they rolled it down a hill then it sounds like people are going to jail.
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Re:Nikola admits prototype was rolling downhill in promotion... by xeromal on Monday September 14, 2020 @02:53PM (#24473715)
Not really. They can probably sell it at a loss and recover it all back in tax breaks.
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Re:Nikola admits prototype was rolling downhill in promotion... by samizdis on Tuesday September 15, 2020 @01:37PM (#24484128)
Great call. See:

https://news.ycombinator.com/item?id=24483980

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