March 18, 2021 10:15 AM, EDT

Nikola Partner Hanwha to Sell 50% of Stake in EV Startup

NikolaNikola's Tre model truck. (Nikola Corp.)

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Nikola Corp. is seeing another strategic partner sell down its stake as South Korea’s Hanwha Group signaled its intention to liquidate half of its holdings in the troubled electric truck startup.

Hanwha, which Nikola has described as a key partner and strategic investor, plans to sell 11.05 million shares, or 50% of its current stake in the Phoenix-based company, according to a securities filing March 17. Hanwha Corp. is the publicly traded holding arm of the group, a conglomerate spanning financial services, chemical and solar energy.

The amount to be sold is worth about $175 million at current share prices. The stock pared a drop of as much as 4.2% in the premarket March 18, falling 3.8% to $15.76 as of 8:52 a.m. in New York.


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The sale comes as Nikola attempts to recover from a blow to its credibility triggered by a short-seller report last year and after another key investor and partner, Robert Bosch Gmbh, slashed its stake in the company three months ago.

“Hanwha remains an important strategic partner and continues to play an active role on Nikola’s board of directors,” Nikola said in an email statement.

A representative from Hanwha said March 18 that it plans to sell the shares from June 9 until Dec. 10 and might not sell the whole 50%.

Hanwha plans to use the proceeds to help expand its energy transition business as well as its hydrogen business. The company will maintain in a strategic partnership with Nikola, the representative added.

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Nikola plans to launch its first zero-emission fuel cell-powered truck in 2023, complete the first phase of a factory under construction in Arizona by year-end and build the first of up to 700 hydrogen fueling stations starting next quarter.


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It has said Hanwha will supply third-party solar farms with panels needed to generate electricity for production of “clean energy” hydrogen for a planned network of refueling stations in the U.S. Hanwha bought its stake in 2018, two years before Nikola gained a public stock listing in June through a reverse-merger with a special purpose acquisition company.

Nikola was one of the first of many EV startups targeted by SPACs and at one time saw its valuation surpass the market capitalization of established automakers such as Ford Motor Co. But the stock collapsed amid concern about federal probes after the short-seller’s allegations, which the company had strongly denied last year.

An internal probe of those allegations of deception disclosed last month subsequently found several cases involving inaccurate statements, including seven made by its former chairman and founder, Trevor Milton, who stepped down in September.

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