Iveco to fully own venture with Nikola on electric, hydrogen trucks (updated)
09/05/2023 10:57
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Deal to have 44-mln-euro negative impact on Iveco's Q1
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Iveco sees no impact on 2023 cash targets
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Shares open down in Milan
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Iveco to pay $35 mln in cash and buy 20 mln Nikola shares
(Adds context, updates share price)
MILAN, May 9 (Reuters) - Iveco Group IVG.MI will buy
full ownership of its joint venture with U.S. start-up Nikola
Corp NKLA.O which develops battery electric and fuel cell
heavy-duty trucks, the Italian truck maker said on Tuesday.
With the move, Iveco loosens ties with troubled Nikola,
after forming the joint venture in 2019 to help the Italian
group, then part of CNH Industrial CNHI.MI and a latecomer to
electrification, catch up with large European rivals such as
Daimler Truck DTGGe.DE and Volvo VOLVb.ST .
Nikola said in February poor demand had hurt delivery of its
battery-powered trucks, that its cash reserves had dwindled and
that it expected 2023 gross margins to be deep in the red.
Despite Nikola's problems, battery electric trucks developed
by the venture based in Ulm, Germany, are already circulating in
the U.S., while orders are being collected in Europe. Fuel cell
hydrogen trucks are expected to hit the road next year.
Iveco said in a statement that the deal announced on Tuesday
would produce a 44-million-euro ($48 million) one-off negative
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.
Its Milan-listes shares trimmed earlier losses and were down
0.7% in morning trading. 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.
Iveco will have free access to and continue developing
vehicle control software for the jointly developed BEVs and
FCEVs. Nikola will be granted some of Iveco's technology licence
for North America and related component supply, while it gets
joint ownership of other technologies the two companies
developed together.
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.
($1 = 0.9084 euros)
(Reporting by Giulio Piovaccari; editing by Gavin Jones, Louise
Heavens and Bernadette Baum)
((giulio.piovaccari@thomsonreuters.com))