Iveco has made a surprising and daring decision: It has taken over the ownership of Nikola in Europe, effectively becoming the sole owner of the joint venture. This means that Iveco will fully control the development, production, and distribution of Nikola’s hydrogen and battery-electric trucks in the Old Continent.
Why did Iveco do this? And what does it mean for the future of zero-emission commercial vehicles in Europe? Let’s take a closer look at this deal and its implications.
The Background: A Rocky Partnership
Iveco and Nikola announced their partnership in September 2019, intending to create a new company called Nikola Iveco Europe to produce hydrogen fuel cell and battery electric trucks for the European market. The deal was seen as a win-win for both parties: Iveco would gain access to Nikola’s cutting-edge technology and design, while Nikola would benefit from Iveco’s manufacturing expertise and network.
The partnership seemed to be going well at first, unveiling the Nikola Tre truck prototype in December 2019 and the groundbreaking of a new factory in Ulm, Germany, in September 2020. The plan was to start production of the battery-electric version of the Nikola Tre in 2021, followed by the hydrogen fuel cell version in 2023.
However, things turned for the worse in September 2020, when Nikola was accused of fraud and deception by a short seller report claiming that Nikola had lied about its technology and achievements. The report triggered a series of investigations by regulators and a drop in Nikola’s stock price. It also led to the resignation of Nikola’s founder and executive chairman, Trevor Milton, who was later indicted on three counts of fraud by federal prosecutors.
The scandal put a strain on the relationship between Iveco and Nikola, as Iveco’s parent company, CNH Industrial, had invested $250 million in Nikola as part of the deal. CNH Industrial also faced pressure from its shareholders and analysts to reconsider its involvement with Nikola, especially after General Motors scaled back its own partnership with Nikola in November 2020.
The Deal: A Bold Move by Iveco
Despite the challenges and uncertainties, Iveco decided to stick with Nikola and take over its ownership in Europe. On December 21, 2021, CNH Industrial announced that it had reached an agreement with Nikola to acquire Nikola’s 50 percent stake in Nikola Iveco Europe for €100 million (about $113 million). The deal was completed on January 3, 2022, making CNH Industrial (and, by extension, Iveco) the sole owner of Nikola Iveco Europe.
According to CNH Industrial, the deal was motivated by its commitment to accelerate the transition to zero-emission commercial vehicles in Europe and its confidence in Nikola’s technology and products. CNH Industrial also stated that it would continue to collaborate with Nikola on technology development and supply agreements and maintain its equity investment in Nikola.
The deal gives Iveco full control over Nikola Iveco Europe’s operations, assets, and intellectual property rights. This means that Iveco will be able to decide on the strategy, direction, and pace of Nikola’s truck development and production in Europe. It also means that Iveco can leverage its expertise, resources, and network to support Nikola’s truck sales and service in Europe.