About the Companies
Hanwha is a South Korean business that invests in many different industries, such as aerospace, chemicals, solar energy, financial services, and more. Founded in 1952, Hanwha states the company is moving toward a new industrial revolution. Today the company has an estimated net worth of ₩2.56 trillion (roughly $2.27 billion).
Nikola is an American EV startup company that specifically develops electric trucks. The business has a similar mission to other EV businesses: change the transportation industry by creating zero-emission vehicles to help the planet and improve people’s lives. The EV startup company has raised $2.5 billion and has an estimated net worth of around $6 billion.
According to an SEC (Securities and Exchange Commission) filing from Tuesday, the business holds a 5.65% stake in Green Nikola Holdings, a subsidiary of the EV startup company, and plans to sell 11.1 million shares.
Half of the shares that are being sold will be valued at $180 million based on the last closing price of Nikola — $16.39 per share.
A spokesperson for Hanwha said, “The stake sale is aimed at securing funds needed for new eco-friendly projects, including hydrogen, and Hanwha will still remain Nikola's strategic partner.”
“Hanwha remains an important strategic partner and continues to play an active role on Nikola’s board of directors,” added the Nikola spokesperson.
The investment business first bought a stake in Nikola in November 2018 before the startup went public. At one time, shares of the EV startup company surged to $93.99 four days after the business went public but averaged at $33.75 per share. Since then, Nikola’s shares have nearly halved in value.
The news of Hanwha cutting its stake in the startup comes a few months after Nikola and its founder, Trevor Milton, were subpoenaed by the United States (US) Department of Justice over allegations of fraud. Milton has since stepped down from Nikola, but the business is still under investigation from the SEC and the US District Attorney’s Office for the Southern District of New York.
Other EV News
While Hanwha may be decreasing its stake in the EV market, other companies are still making large strides in the industry. Startup Savant reported earlier this week Northvolt received a $14 billion purchase order from Volkswagen for EV batteries. Additionally, BMW revealed it is expecting half of its sales to be from electric vehicles by the end of the decade.
About the Author
McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.