Ladies and gentlemen, welcome to the General Motors Company Investor Conference Call. During the opening remarks, all participants will be in a listen only mode. After the opening remarks, we will conduct a question and answer session. September 8, 2020. I would now like to turn the conference over to Rocky Gupta, Treasurer and Vice President of Investor Relations.
Thanks, operator. Good morning and thank
you for joining us as we discuss the exciting partnership with Nikola that we announced earlier today. Joint press release was issued this morning and the conference call materials are available on the GM Investor Relations website. We are also broadcasting this call via webcast. I'm joined today by Mary Barra, GM's Chairman and CEO and John Stapleton, GM's acting CFO. We're also happy to have Nicola's Executive Chairman, Trevor Milton and Nicola's CFO, Kim Brady also participating in this call.
Before we begin, I would like to direct your attention to the forward looking statements on the first page of the chart set. As usual, the contents of the call will be governed by this language. I will now turn the call over to Mary Barra.
Thanks, Rocky, and good morning, everybody. I appreciate the opportunity to talk with all of you. I have a few remarks, then I'll turn it over to Trevor and then we'll be available to answer your question. So with today's announcement, GM is seizing an important growth opportunity with Nikola to boldly move into broader markets with our HydroTech Fuel Cell and Ultium battery systems. Under the agreement, GM will engineer, validate and build the Nikola Badger battery electric Partnering with Nikolai, a leading disruptor in the EV and fuel cell space gives us validation and high volume commercialization opportunities in a multibillion dollar total addressable market.
Fuel cells will become increasingly important in the heavy duty class of commercial vehicles because they are more efficient than gas and diesel engines. Buying our production ready fuel cell technology solutions to these vehicles will accelerate a 0 emissions future. And we see additional growth opportunities for hydro tech in multiple transportation, stationary and mobile power end markets. Our Hydrotech fuel cell technology was developed by our joint venture with Honda and the fuel cells will be manufactured at our Brownstown facility in Michigan. As we begin to introduce our Altium powered lineup, development work on our next iteration of Altium batteries continues to move forward.
Our Ultium battery technology roadmap includes silicon anodes and lithium metal anodes that will improve vehicle range, affordability and reduce dependence on rare and costly metals. In testing, we are already demonstrating automotive grade durability and significantly higher energy density. This agreement also provides substantial financial benefits to GM. In exchange for our in kind contributions and access to our global safety tested and validated parts and components, we will take a $2,000,000,000 equity stake in Nichola representing an 11% ownership. GM expects to receive an excess of $4,000,000,000 of benefits between the equity value of the shares, contract manufacturing of the Badger, supply contracts for battery and fuel cells and the EV credits retained over the life of the contract.
Nicolas is the 2nd partner to choose our modular EV platform and Altium battery Altium battery system over competitors' technologies. In April, we entered into an agreement with Honda to jointly develop 2 new all electric vehicles and we are open to further alliances. Through these partnerships, we are growing our presence in multiple high volume EV segments while building scale to lower battery and fuel cell costs and increased profitability. Working with like minded partners will help accelerate EV development, production and consumer and will also improve our capacity utilization and optimize capital spend as we scale our very important EV business. And to spur greater and faster consumer adoption of EVs, we recently announced a partnership with EVgo to install 2,700 fast chargers in cities and suburbs over the next 5 years.
So we couldn't be more excited about this opportunity to partner with Nikolay. And with that, I will turn it over to Trevor.
Thank you so much, everyone. I appreciate it. It is a very exciting time for everyone involved, especially everyone here at Nikola Motor Company. The reason why this is so special is Nikola is an incredibly innovative company that has been able to cause quite a transformation in the heavy duty trucking world. We've been able to show other groups, other automotive groups and also legislation around our legislators that zero emission can actually compete with those that are not zero emission for the first time in history.
This relationship with General Motors is very special to me because this is an example about how 2 companies can come together and leverage each other in a way each other's technology in a way that it helps drive down cost and further the development of 0 emissions across the globe. A prime example of that is the battery in the fuel zone. Nikola expects over a $4,000,000,000 savings just in batteries alone. Now GM gets a great stake in Nikola. They've spent 1,000,000,000 of dollars developing their electric vehicle powertrain, the drivetrain on that vehicle, their batteries and their fuel cell.
And rather than letting that asset sit there and try to build it organically internally, one of the things they've been able to do is jump start this growth internally at GM with Nikola. So what does that mean? That means we're going to be able to leverage the same powertrain that they use on their electric vehicle platform. We'll be able to use their same batteries throughout not only our Badger, but also our Class 8 trucks. We have the 1st ever and largest battery electric Class 8 truck in the world and going into production uses a 7 20 kilowatt hour battery going into production in Europe and the U.
S. Starting next year. We're also going to leverage the GM batteries on those programs, allowing us to see quantities few others in the world will ever see and we can do it jointly with General Motors. This relationship with General Motors you honestly probably could not pick a better partnership. Nikola needed manufacturing, Nikola needed supply chain and Nikola needed of how to build a pickup truck that would not sell.
GM needed all the points that I just brought up prior to that, just barely. If you bring those 2 together, it truly is a partnership made in heaven in my opinion. I could we had options to pick almost any OEM in the world. I had multiple term sheets on my desk and this is the one that we picked. And so I wanted to thank Mary for that.
Obviously, we're here to support GM. GM is here to support us. But anything I can answer, I'm happy to be here and I couldn't be more excited about this opportunity.
Okay. Operator, we're now ready to take questions.
Our first question comes from the line of Rod Lache with Wolfe Research.
Good morning, everybody. Mary, I had a few questions for you. Maybe just firstly, can you just talk to us a little bit about what your vision is for this Altium business? It sounds like it's starting to become kind of an industrial platform now that you're supplying not only yourselves, but also Honda, Nikola and you're saying others. Is this the kind of business that's sort of run separately as sort of a supplier to GM and others within GM?
Are there other ancillary opportunities that you see in other industries or in software or any other arena?
So Rod, I appreciate your question. And I think this is a departure from what the OEMs have traditionally done. And I think it's a huge opportunity. General Motors for years has been investing in fuel cells our EV platform with the latest being the Altium components and systems. And to be able to leverage that and get scale across multiple partners, we think is a huge opportunity and recognizes the technological leadership that we have.
So I think it's an opportunity to look at the industry and as we transition to electric vehicles and an all EV future really sees and capitalize on the work that we've done in the technology that we have.
One of the things that GM doesn't have that Nicola has had and other startups have had is that maybe a lower cost of capital and maybe some flexibility in pursuing these kinds of businesses. Do you see GM ultimately originating your own kind of startups and utilizing this as well? Or is this more with existing third party companies?
Rod, it's such a dynamic time in the industry right now and there's so many opportunities. I don't want to specifically rule anything out, but we think the strong partnership we have with Honda, now with Nikolai, and the very strong portfolio of EVs we plan to roll out across all of our brands gives us a tremendous opportunity to really demonstrate growth in multiple fashions. When you look at the fuel cell business, being able to supply that technology into a new market for us with the Class 7 and 8 trucks. Again, that just represents growth. So we're going to be looking for ways we can continue to unlock value based on the capabilities that we have, not only the technology, but the manufacturing capability, the ability to manage a very complex supply chain and really drive scale, I think it puts us in a very unique position to keep capitalizing on it.
Okay. And lastly, can you just talk about the addressable market for fuel cells? It's something that I've heard GM talk about I think for 20 years and it's always been 10 years away. It sounds like it's finally being commercialized. How would do you expect that to ramp?
How big could this become?
We think it's a multibillion dollar total addressable market and being able to partner with Nikolai and get the scale that we'll get in the not only the Class 7 and 8 truck application, but also the Badger fuel cell version gives us an opportunity to continue to refine the technology, go down the cost curve, which is going to unlock more and more applications. So I think to your point, we are at the point where we're able to unlock that value and I think there's a tremendous TAM available.
Okay. Thank you.
Your next question comes from the line of Joseph Spak with RBC Capital Markets. Your line is on mute. Please unmute.
I apologize. I was muted there. Thanks, everyone. First question is for Mary. I just wanted to on the last earnings call, you sort of talked about potentially selling technology to other companies, but you also mentioned the desire to protect e franchises such as the truck franchise.
It could be argued you're sort of helping build up a competitor here. So just want to hear you talk a little bit about how you view the electric truck market then GM's positioning and branding within
that. So I think the there's going to be plenty of opportunity in the electric truck market, just as there is today with different brands and different offerings depending on what the customer is looking for. And the opportunity that we have here allows us to have additional partners, which will give us scale and be able to continue to take costs down, which is going to be one of the key enablers for unlocking the EV truck market of getting cost down. So I see it as a huge opportunity to leverage the technology we've been working on, work with a great partner. And I do think there's tremendous opportunity.
Okay. And then
Hey, Mary, also I was also going to say that we were going to do this anyways. Nikola had the truck our own version of truck built. We had multiple turn sheets from different OEMs. So I think it was actually really brilliant for GM to say, look, we'd rather have an equal partner of our family than competing against our family. And I think that was a really smart move by GM to say, you know what, let's all come together and let's work together and not they're going to be a competitor any competitor out there, but rather than bring them in to be part of the family and rather than getting no benefits from it.
So I think that was a pretty smart move.
Thanks. And Trevor, maybe just with the using GM for fuel cells. I know you did a lot of development work on the fuel cells with Bosch. Maybe you could talk a little bit about what you saw that made you convince GM is the right partner here on the trucks as well?
Well, I think the way that you the best way to put this is GM is going to be an incredible partner with fuel cell. They've done an awesome job with their fuel cell. They're going to be integrating it into the Badger. It will come out it will be coming out both as a battery electric version and fuel cell. We've done a lot of work with Bosch and also internally here at Nikola building our own fuel cells.
So there's very few people that know fuel cells like we do. We're I kind of like to believe that Nikola was a lot of the messaging around the worldwide fuel cell could work and how you can build out the network with the vehicles and kind of solve some of those complex problems. And Bosch is still an incredible partner of ours and we plan on working with them. My hope is actually to bring the 2 together and they can leverage different parts that work together with each other. So Bosch has a lot of parts within the balance of plant that are awesome.
GM has got a ton of experience in fuel cell as well. And I believe that to be honest with you, I think there's going to be a lot of collaboration in parts supplies and work together between all the parties. I don't really look at it as like necessarily one or the other. This world is going to be everyone is going to be building so many fuel cells that no one is going to be able to handle the production. It's going to take everybody.
And right now, we're focused on getting this the Badger out as fast as we can and GM's got that awesome fuel tech that developed with Honda that makes it a natural fit.
Thank you.
Your next question comes from the line of Adam Jonas with Morgan Stanley.
Hi, everybody. Thank you very much. So Mary, I think Rod really very elegantly tried to get to this. Your stock is having a huge day in a down market. The market is kind of viewing GM as a stable of unicorns that are yearning to run free in the pastures of portfolio managers all over the world, you use language like all options or keep all options open, which is the right language to use I think for any CEO and Chairman at this time for your industry.
But your stock's been kind of moving around as you're well aware around the spin mania, right? And you have a chance right now on this call to put that to bed and say, look, we do have unicorns in our stable and they're better off within GM or you could keep reverting to the all options on the table language, which I totally respect, but we're still going to keep asking the question. I just I don't want to frustrate you. I'm just trying to explain how I think it's going to be, but I just did want to give you one chance in your very clear language to say, put it to bed, it ain't happening, let's move on, or whether it's just something that's just left on the table and we see how the business and the opportunities play out over time.
Hey, Adam. It's our role to make sure we're doing everything to unlock value for our shareholders over the long term. We believe in an all electric future and we are doing working very aggressively with our technology, both fuel cells and battery technology with Altium to unlock that value. And with partners like Honda and now with Nikola, we see a huge opportunity. So we're going to keep working to achieve our goal and do what is right for our shareholders perspective over the long term.
And beyond that, I don't have anything else to say.
Makes perfect sense, Mary. I just had another follow-up. For distribution, maybe Trevor, you could take this or Mary, have you discussed it seems to me that there'd be an opportunity not just leverage GM scale and battery and powertrain, but time to market for distribution. I mean, maybe you don't want to be a B2C and GM has deep experience in B2C and Trevor, you have an opportunity, maybe it's a different arrangement to be worked out to use GM's distribution for that. I didn't know if you wanted to comment.
Yes. I mean, I think that look, the world's changed so much in the last 7 or 8 years, it's just incredible. It's so hard to keep up with it, right? The Tesla model came along where they started selling directly to consumer and it disrupted everything. I mean, every OEM around the world didn't know how to take it.
They had to analyze it to see the benefits and also the downfalls. There's a lot of good and a lot of bad from that. And I think what we've done with GM is we just said, look, Nikola retains the rights to sell and service and warranty the trucks. And I think our main focus here is to not do anything too fast and analyze this. We have an opportunity now to do it right and make sure it's done the right way the first time.
And we've been I've been picking Mary's brain for weeks now on this around the dealership network, the service, the warranty, everything else. And how do we do this the right way the first time? So those discussions will come about naturally over the following months. We'll let everyone know what we decide to do and how to do it. But it's a unique opportunity to do it right the first time and that's pretty cool.
That's great. And maybe just one follow-up and my last question, Mary for you. GM has so many exciting opportunities to bring to market pure electric vehicles, right? And the mantra has been 100% electric future for many years now and you're really putting the physical you're doing physical things and real, real partnerships to make that happen and you're starting to if I'm betting against GM on this, I'm starting to get really worried because you're starting to create some nice anxiety there. But when I think about the distribution, I'm wondering if you and your competitors, as you bring out these beautiful connected all new architecture, highly automated electric vehicles, are you still going to distribute them through a distribution of the 64 year old dealer franchise laws, which and I'm not blaming it, it's just a situation today where you have a beautiful product and depending on how blue my hair is or how large my prostate is, too much information here, okay folks, I'm going to get charged a different price for that same car.
It's just not where the business is going. I'm wondering if there's an opportunity to do that Tesla loophole or if it's an all new brand and pure EV and you didn't have that before, whether there is some way to work with your dealers in a positive way to bring that one price experience without the embedded imperfections of the system, if I can be polite about that. Does that make sense?
No. Adam, I think what you're saying. And look, we this industry is transforming even faster than what I said it would transform more in 5 years than it had in the last 50. We see that continuing to happen. We have great We see that continuing to happen.
We have great dealer partners and I've been in dialogue with them over the last several months about how do we transform to lead when you think about having EVs get to 20%, 30%, 40% of the USR. That means it's a whole different customer and it's their only vehicle. And so that importance of that local dealer can play a very important role. But we're working to transform every part of our business and we view our dealers as a strength with what they can bring. And so you'll see us continue to work and partner with them and innovate.
Thank you.
Your next question comes from the line of John Murphy with Bank of America.
Good morning, everybody. Maybe just a first question. When you look at this deal, it's not necessarily something new to GM. I mean, obviously, the deal itself and the structure is new, but the technology is something that you've had, in house. And you're showing that beyond even EVs, you're, playing in the next gen of powertrain technology.
So as you look at GM, I mean, don't you think this advanced powertrain technology, which is class leading, is really core to the company and that you want to keep that sort of internal and that you may over time isolate that by separating off some of the older technology. I'm just trying
to understand sort of philosophically how you
think about this because there's a lot of obviously there's a lot of questions on this and there's a lot of debate in earlier questions. But it just seems like that powertrain technology is what GM is and that you might want to carve off stuff that's less advanced or time as opposed to carving this off and giving it to somebody else.
Hey, John, we totally agree. I mean, if you think about GM's history of having a strong propulsion background and really bringing industry leadership from an internal combustion engine and now with the investment we've made frankly over decades with fuel cells and electrification to have this type of industry leading technology. And we're really looking at the industry differently because when you look at the cost of development and all of the expertise and work we've put into it, how do we leverage that to create long term shareholder value. So very important, the work we've done and now we're I'd say we're at the early the beginning of really being able to leverage that with great partners like Honda and with like Nikola and with our own EV portfolio that we'll be launching. So I definitely is a core piece of how we compete and win in lead.
Okay. And then just a second question on the economies or the economics of the Badger. I'm just curious how those are going to be split, how that's going to be set up? And as we think about this as a light duty pickup with fuel cell powertrain, is there an opportunity over time for hydrogen fuel cells to take over even for EVs 10, 20, 30 years down the line? I mean, Mary, you've got a lot of experience in this.
I mean, what's your opinion?
Well, I think the issue is going to be how quickly do we take cost out of fuel cells, so it becomes the right choice across different markets. And we're seeing with Class 7 and 8 trucks, when we look at some of the other applications, whether mobile or excuse me, stationary power or sea, that's all going to give a scale and learnings because it's going to get the cost down. So that's what's going to drive how far we can take the application. But clearly, especially for larger vehicles right now, it's crossing over to make sense. So we see it as an opportunity for significant growth and I know Nikola does as well.
But would it be fair to say that fuel cells are far better for the environment than an EV?
Well, I think you have to look at the application and affordability. If you're just talking pure technology, it's definitely a very good technology as it relates to 0 emissions when you look at it. But I think it's also got to be affordable to be able to be leveraged and have a real impact.
So it's cost and distribution that are the hurdle right now, but if you could solve for those fuel cells would be superior to EVs. Is that a fair statement?
I think it's going to be a part of the equation for quite some time.
Okay. Thank you very much.
Your next question comes from the line of Ryan Brinkman with JPMorgan.
Hi. Thanks for taking my question, which is for Mary. Firstly, from a housekeeping perspective, I believe this is the case, but can you just confirm that you are receiving a fixed number of shares or percentage stake rather than dollar amount such that you benefit from the rise in Nicola shares today? And then more broadly, do you have any updated view on the proliferation of battery electric vehicles versus fuel cell electric vehicles? I know you have invested in hydrogen for a very long time, although more of the focus in recent years seems to be on batteries.
Might you consider fuel cell propulsion for your own light vehicles in the future, including maybe those that also will ride on the same platform as the Badger?
Well, first, the answer to your first question is yes, it's in shares. So we're able to participate in and one of the reasons we're so excited to work with Nikolai is we see growth opportunities for both companies as we partner and work together. And by partnering and working together, that also gives us speed. And as you said, we've been working on fuel cells for a very long time. Our focus on EVs has been from an affordability because we do believe with this next generation, we're going to begin launching with the LTM platform that we can have a wide range of vehicles off the platform that are what customers want and also lead to profitability.
And by now commercializing the fuel cell technology that we've worked on, we'll be able to continue to get costs down and then the door is really open for how far we go in applying the technology. But as costs come down, we're going to put the best technology in to provide consumers value. Great.
Question comes from the line of Mark Delaney with Goldman Sachs.
Yes. Thanks very much for taking the questions. My first question was for GM and hoping to better understand the P and L implications from this potential transaction. And maybe you can also talk specifically about how to think about margins on the products that GM would be providing to Nicola and if that margin includes the benefits that GM would be receiving in terms of increased capacity utilization and then also the added scale to your Ultium platform?
We talked about as we execute over the life of this deal, it's a greater than $4,000,000,000 opportunity for General Motors. Beyond that, we're not releasing more specific details at
this time.
Okay. And then for a follow-up question, just in terms of how to think about investments that the GM may need to put into this transaction. I saw on the Nikola 8 ks that there's CapEx that Nicola could be providing, but are there incremental investments that GM needs to make either in terms of capital expenditures or potentially R and D in the fuel cell area that you may need to make in order to support this?
All part of our previous plan.
Okay. And then just lastly, and then maybe this is for both Trevor and for Mary. Can you talk about how you think about this partnership scaling over the longer term and maybe other areas that the 2 companies could collaborate and the initial partnership is for pickup trucks. But I'm curious, Trevor, do you think about Nikola potentially doing SUVs in the future? And Mary, how would you think about potentially partnering with Nikola in other areas?
Thank you. Yes.
I think that it all comes down to success, right? If we all execute really well and things are going well, I think there's multiple options that could come. I mean, Nikola never was an automotive oriented consumer car company. We started out as a very large Class 8 truck company, targeting the 2nd largest polluting industry in the world. That was our goal.
I realized a very good opportunity to drive the cost down of our fuel cells and our batteries by going into the consumer market for the pickup truck because that's where it can make sense on a inside that market in a certain situation and it makes a lot of sense in some of those markets. So I think as time goes on here, I don't think anything is out of the picture. I think it all comes down to success. If General Motors loves what we're doing and we love what they're doing, I think the sky is the limit down the road. I mean, we'd rather work with them than against them.
And we both have that feeling. And so we're trying to build something that's a very mutual partnership where they get the you guys saw today, they got rewarded for being bold and innovative with stock in a company that has an incredible potential here. And we got rewarded with saving in our side over $4,000,000,000 in battery costs alone in our programs. So it makes total sense to help someone else if they're helping you. And that's why I like this General Motors thing is that it's just so friendly and I want to keep it that way.
And so I hope it grows and that will be fun. We'll see where it goes.
Yes, I very much agree with what Trevor said. And the very first time Trevor and I had an opportunity to meet, we talked about looking for win win opportunities. And I think that's what we've established here. And the teams are already demonstrating that they work well together and they have high respect for each other. So I agree the sky's the limit on the different areas that we can pursue when it's going to be beneficial to both companies.
Thank you and good luck.
Thank you.
Your next question comes from the line of Emmanuel Rosner with Deutsche Bank.
Hi, good morning everybody.
Good morning.
Mario, I was hoping to just understand a little bit better the economics of the deal from GM's perspective. You said you expect about €4,000,000,000 of benefit from it. And then you I think the press release included what's inside that €4,000,000,000 For the manufacturing and supply part of it, both for the battery packs, for the Badgers, for the powertrain, does that include both the revenue and the margin for GM in this $4,000,000,000 or is that just the margin piece?
We're not going to go into a lot of specific detail on that, but it generally captures the margin.
Okay. One quick follow-up question on this. What volume expectations for these trucks are embedded in the $4,000,000,000 estimate?
Trevor, do you want to take that of how you see your business growing?
Sure. I mean, yes. So our main goal with GM was to set aside a certain amount. It would be in the tens of thousands that we could easily get to with their existing ability without causing too much disruption. Once we get into the really high volume, as soon as we open up the orders to really everybody, We're going to have to analyze how we grow because we want to make sure we have minimal cash obligations or difficulties for GM.
At the same time, we have to make sure that we can grow and they've given us a lot of ideas on how to do that. And that's I think has been a lot of fun with Mary as we've said, okay, this is how many do we think we're going to be coming in. But Trevor, here's a few ways you could scale it to where it would help both parties. And those discussions are confidential. They take a lot of work with the financing departments.
And so we're working on that now and we'll see. It'll be we have a big decision to make. Does Nico go big time? Like do we want to go towards mass production of incredible high quantities of vehicles? Or do we want to stay in more of a number that helps drive our fuel cell cost down, helps drive our profits, but we're not trying to be the highest producing truck maker in the world.
So we have some big questions to answer inside of Mequil that are quite frank, a lot of fun. I love these hard questions. This is what makes the world go around and it's what sparks innovation. So I'm going to be picking Mary's brain, driving her nuts, asking her every question you can think of. And luckily, I've got a great CEO next to me and Chairman who is willing to be honest and upfront with me.
And so, I'm going to leverage that and try to figure out how many we actually want to build. I can tell you this, I think we'll sell I think we'll have a bigger problem building than selling. We're going to sell a lot of these trucks. The question is how many do we want to build.
That's helpful, Trevor. And maybe just follow-up question for you. And I think Kim Brady on the line as well. But how should we think about the differences to your business plan and projections from this agreement? I understand that it provides a lot of efficiencies and savings.
So how should we think about it directionally versus what you may have told us a couple of months ago?
Emmanuel, great question. As you know, the projection that we have provided does not include anything related to the badger. So as we go forward, I think we'll be able to provide some better guidance in terms of how it impacts our revenue as well as cost in 2022 and give you some better picture of our CapEx we anticipate providing those guidance in the near future.
Okay, great. And then very finally, Trevor, what else can we expect from Nikola over the rest of the year?
Well, I think there's a couple of things we're focusing on. We do when we went public, we promised people three things. 1, some of the largest orders of EVs in the world, which we barely announced one of those. We got some great stuff coming as well. Number 2 was an OEM partnership for the supply chain for the Badger.
We just accomplished that today. We told everyone we'd have those done by the end of the year. We did them literally within a month or 2. That's incredible, the speed at which we're going. The third one is the hydrogen network, which plays into all the Badger, which plays into the fuel cell truck, which plays into everything.
And that one is our focus, leading up to Nikola World. So that's what you'll expect from us is a focus on the hydrogen network, man, what an exciting 3 months we're going to have. You couldn't write this stuff in a movie if you wanted to.
Great, definitely. Many thanks.
Your last question comes from the line of Dan Levy with Credit Suisse.
Hi, good morning and thank you for taking the questions. First, just a question for Mary and team GM. Could you shed some insight into how your EV funding plans are evolving? If I think of the 2 primary drivers of what's funding your EV, profit from existing products and that's trucks in particular. And second, it's partnerships that really help defray costs.
So do you see one of those levers as incrementally more responsible for funding your EV plans? And in terms of the benefits of the partnerships, should we see that flowing to the bottom line? Or is this simply a way to accelerate your spend on EV beyond the $20,000,000,000 you've discussed unless it won't flow to the bottom line?
So, we see the we have an incredibly strong truck franchise as well as SUV crossover franchise that allows us to be able to reinvest in the business. You're very familiar with our capital allocation framework. So this opportunity, I think, allows us to just increase our scale, which will lower costs, which will help, I think, accelerate our business and further expand the profitability. So we see it as a huge opportunity. I don't want to say one is more important than the other.
But as we look, I think this concept of being able to leverage all of the work we've done and all the investment we've made in technology to drive more scale and with great companies like Nikolai and Honda choosing to use leverage the technology. I think that's a huge opportunity for us as we go forward and that'll just it will show up in the bottom line for sure.
Great. And then just a follow-up on that. Would you say you'll be opportunistic about adding other partners to Ultium? Or is this a priority and that without adding other partners, the economics of bev just won't work? How much of it is a nice to have versus a necessity?
When we first shared the work we were doing on the Ultium platform, we said with that platform, we would be able to provide a wide range of EVs that would be profitable. The partnerships we have with Honda and now with Nikolai are additive to that. And I would say it's important, you guys know I've been in the business for a really long time. It's important that we have great partners that we know we can work with, that we can explore opportunities, brainstorm with each other, solve challenges in a win win fashion. And we have a long track record with Honda, but I think we have a very strong relationship already established with Nikolai.
The teams are working well together and so we're going to build on that. So it's important to have partners that have a shared vision and have the right values and mindset to partner with as we go forward.
Great. And then if I could just ask a question of the Nikola team. I think you mentioned you had multiple term sheets from different automakers. Can you just help us understand how many other automakers were seriously considered for partnership? Or maybe said differently, how many others do you see as having comparable capability to GM on EV and fuel cells that made partnership realistic?
I think those are 2 different answers. I mean, obviously, we had quite a few term sheets with groups around the world and some of them were really great in some areas and they kind of didn't bring as much value in other areas. And I think that's where the second answer is, is that we felt like there was really one that brought everything to the table and that was GM. It was hard. It was a really hard thing for us.
We had I mean, I met with most of the groups around the world. And I was very surprised at the reception we got from the groups around the world that wanted to do a deal. And I was just very, very surprised. I did not expect that. And it was very interesting sitting down with the Board and explaining the benefits of each group and what they bring to the table.
And the thing that GM brought to the table was a battery that's validated, ready to go. You have a fuel cell that's already done. You're ready to rock and roll for the bat. We need that in the Badger immediately. And we also have other programs don't everyone knows about our other programs going on too that we can use them.
And you had the supply chain that we didn't have. You had manufacturing facilities that were already built. And we did something similar in Europe with Yveco, although Yveco didn't bring the fuel cell and the other tech that the battery and all that other stuff, we're doing all that in house. But with Iveco, you saw that in the Class 8 truck market and it was a tremendous success and we've since replicated that here in the U. S.
With the Badger. So who was the who had it all, that was GM, Who had a lot of it? Or who had some of it? That was the other groups and there was there's at least 4 or 5 others and they were awesome. But at some point, I had to tell them, hey guys, thank you, but we're going to have to put this on hold because we're going into deep discussions with someone and I can't lead you on.
And I called them and I told them that. And so we negotiated in good faith. We never let anybody on. We didn't pull the rug out from underneath anybody and we didn't do any of that stuff that some of the people do. So I feel like we came to a great conclusion here with GM and I think we'll have mutual respect for a long time because of it.
That's helpful color. Thank you.
Thank you. I'd now like to turn the call over to Mary Barra for her closing comments.
All right. Well, thanks everybody again and we really appreciate your time. I hope you see that today's announcement and partnership brings together 2 companies that although we have very different backgrounds, we are very much aligned and have a shared mission to do what's right for society and what's right for our shareholders. When we were together in March, those of you who are able to attend EV Day, our goal was to give you a glimpse of everything we are doing to deliver a profitable zero emissions future. Today was another very important step as we work toward that future.
And I've talked to you many times about General Motors has the right team, very capable engineers, manufacturing across the board, the right technology that's getting validated. And today we added a very important, the right partner to move forward. So we're very excited about this and we'll continue to give you updates. And so I want to thank you very much and I'll turn it over to Trevor to see if you have any closing comments.
No, I just want to thank everyone and thank these big groups that have believed in entrepreneurs. It's so easy to criticize sometimes entrepreneurs who are trying to change the world. And there's many people much greater than myself and many people before me that have paved the way for us to be here. But it's so nice to see when things can come together, when things can work out and when great minds and innovative leaders like Mary see an opportunity like Nikola to be able to benefit both companies. And what an incredible chance we have to change the world, change emissions, target the 2nd largest polluting industry in the world, get rid of these emissions and also build the most fun cool truck the world's ever seen.
And I love this. It's just a great partnership. And I just want to tell Mary from myself, thank you for being innovative and just being bold and seeing those opportunities when they come. It takes a great leader like her to run to guide GM. And she's coming from an entrepreneur, I can tell you I've enjoyed every second of it with her and that's rare for me to say because most OEMs say that about.
Trevor, you're too kind. Thank you very much. And we look forward to continuing this partnership. And with that, I think we're all set. So thanks everyone.
Appreciate your time.
Ladies and gentlemen, that concludes the conference call for today. Thank you for joining.