General Motors buys 11% equity stake in electric truck maker Nikola

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Shares of Nikola, which competes with Tesla Inc’s (O:TSLA) Cybertruck, soared more than 30% to $46.30 in pre-market trade.

General Motors will receive $2 billion in newly issued Nikola stock and will get a right to nominate one director to the electric truck maker’s board.

As a manufacturing partner, the No.1 U.S. automaker said it will build the Nikola Badger with either an electric battery or fuel cell electric variants. Production is expected by year-end 2022, and will have lower costs across other models.

GM expects to receive benefits in excess of $4 billion between equity value of shares, contract manufacturing of the Badger, among other perks as part of the agreement.

The companies expect to save $4 billion in battery and powertrain costs over 10 years and over $1 billion in engineering and validation costs.

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