MILAN — Iveco Group is set to loosen ties with U.S. start-up Nikola as it said on Tuesday it was purchasing the full ownership of their joint venture which develops battery electric and fuel cell heavy-duty trucks.
The Italian truckmaker and Nikola had formed the joint venture in 2019 to help Iveco, then part of CNH Industrial and a latecomer to electrification, catch up with large European rivals such as Daimler Truck and Volvo.
Nikola and other U.S. EV startups, which have gone public with hopes of shaking up the auto industry, are now facing challenges as their market valuations have shrunk in recent months amid slowing demand, production challenges and as market leader Tesla has cut prices to stoke orders.
Despite Nikola’s troubles, battery electric trucks developed by the venture with Iveco, based in Ulm, Germany, are already circulating in the U.S., with orders being collected in Europe. Fuel cell hydrogen trucks are expected to hit the road next year.
Iveco said in a statement the deal announced on Tuesday would produce a 44-million-euro ($48 million) one-off impact on its first-quarter income statement that it expected to absorb through cash flow generation, without changing its cash flow target for this year.
Shares of Iveco trimmed earlier losses and were down 0.9% by 1115 GMT. Nikola shares were up 3.6% in U.S. premarket trading on Nasdaq.
Iveco will report its first-quarter results on Thursday.
Equita analyst Martino De Ambroggi said the move would not have a relevant impact on Iveco as any contribution from Nikola was expected only beyond the group’s current business plan.
As part of the agreement, Iveco will focus on Europe for the further development and commercialisation of its own battery electric (BEV) and fuel cell (FCEV) electric trucks, while Nikola will concentrate its operations in North America, the two groups said in a joint statement.
The two companies will continue to share and develop certain common technologies, while Iveco will remain an important partner and key supplier to Nikola, they added.
Iveco’s overall investment, through available liquidity, will be partly in cash, for $35 million, and partly handing back to Nikola 20 million of the U.S. company’s shares, part of the stake Iveco holds.
Iveco will retain five million Nikola shares after the deal, a source close to the matter told Reuters.