Key Points
- Nikola Corp agreed to purchase Romeo Power Inc for US$144 million.
- The purchase will accelerate Nikola’s efforts to produce battery packs.
- Nikola will soon start developing its electrification platform with Romeo Power.
Nikola Corp, one of the leading manufacturers of heavy-duty vehicles, agreed to purchase Romeo Power Inc. Nikola Corp specializes in manufacturing heavy-duty commercial level battery-electric vehicles. It will buy Romeo Power for US$144 million.
The prices for electric batteries skyrocketed by 20% since last year. The supply and production shortage of electric batteries resulted from the COVID-19 lockdowns, disruptions of production, and slow shipment. However, electrification remains a significant target of many electric vehicle companies. Hence the shortage and price increase of electric batteries pose a considerable obstacle to producing electric vehicles.
Most electric vehicle companies took steps to secure electric battery supply to their plants. Nikola purchasing Romeo Power will also accelerate its electrification platform. This offer gives each share of Romeo Power a value of 74 cents. Furthermore, Romeo Power’s company shares elevated to 22% during trading.
Romeo Power has been a battery supplier of Nikola for its prototype electric trucks. Nikola Corp also purchases electric battery supplies from LG Energy solution and Proterra. Consequently, this deal will support the company’s decision to produce its own battery packs in 2024. This will allow Nikola to produce more batteries at a lower cost.
Reference,
https://www.channelnewsasia.com/business/nikola-buy-battery-supplier-romeo-power-us144-million-2850181
