TO THE EDITOR:
Regarding "GM, Ford look to tap startup swagger with Nikola, Rivian deals" (autonews.com, Sept. 10), I would like to observe the critical distinction between the Ford-Rivian deal and the GM-Nikola transaction.
As noted, Ford invested in Rivian to gain access to the skateboard electric vehicle architecture. That maps appropriately with the headline of the article and the precedent of Ford's investment in Argo AI on the autonomous vehicle side.
General Motors, on the other hand, is providing key technology (Ultium batteries and Hydrotec fuel cells) and manufacturing support to Nikola, including engineering the vehicle. This is a smart move for GM. It provides a lower-risk approach, with limited capital investment, and a path to really test both technologies in a production environment. Receiving Nikola stock is a free option on its future success. Conversely, the deal undermines Nikola's claims on technology leadership in battery-electrics and fuel cells.
Therefore, the GM deal is not about "tapping startup swagger" but is a very strategic move to commercialize its technology and drive down the overall costs of bringing these new technologies to market, i.e., making GM's own EV lineup more cost competitive.
KUNAL BHALLA, Palo Alto, Calif., The writer leads the auto tech practice at a global investment bank.