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General Motors is seeking a higher equity stake in Nikola Corp. in return for sharing its fuel cell and battery technologies as well as building the Badger, a heavy-duty electric pickup, for Nikola.

Two people familiar with the deal told the Detroit Free Press that lawyers for GM and Nikola have been meeting daily. GM originally agreed to an 11% equity stake in Nikola, but given a dramatic plunge in Nikola’s stock price, those terms could be on the table for renegotiation, they said. Both people have asked to not be identified because of the sensitivity of the negotiations.

The GM logo is seen on the top of the center tower at the GM Renaissance Center in Detroit. (Photo: Patricia Beck, Detroit Free Press)

The companies announced the deal Sept. 8. At that time GM’s 11% agreed to equity stake in Nikola would have been worth about $2 billion. But after a short seller’s report accused Nikola of fraud, its stock price plummeted.

The deal with GM was expected to close by Sept. 30, but on Tuesday, GM said it had not closed on it and was continuing discussions with Nikola.

“GM has one over-arching interest: The GM business and the GM brand,” said Jacob Frenkel, a former federal prosecutor and chair of government investigations and securities enforcement at the law firm Dickinson Wright in Washington, D.C. “If Nikola advances both, even under intense scrutiny, there very well could be a business relationship going forward. If GM senses reputational or business risk, any agreement is bound for the shredder.”

Both sides hope to reach an agreement soon, the people said. The companies have until Dec. 3 to close on a deal or either one could terminate it, according to Nikola’s U.S. Securities and Exchange filing. 

Boardroom changes

Meanwhile, Nikola