Venerable automaker General Motors Co. (NYSE: GM) and upstart electric and fuel-cell truck maker Nikola Corp. (NASDAQ: NKLA) have agreed to a strategic partnership that gives GM an 11% stake in Nikola in exchange for in-kind services related to Nikola’s Badger pickup. GM’s stake in Nikola is valued at $2 billion and includes the right for GM to nominate a director to Nikola’s board of directors.

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Among the in-kind services that GM will provide are engineering, validating and manufacturing the Badger electric vehicle (EV) and fuel-cell versions using GM’s Ultium battery technology and Hydrotec fuel-cell systems. GM also will tailor vehicles for different markets (homologate).

Because no cash is involved in the deal, both companies say they expect to realize about $4 billion to $5 billion in benefits. Nikola expects to see savings of some $4 billion in manufacturing costs and as much as $1 billion in engineering costs. GM expects to receive about $4 billion in benefits from building the Badger pickups.

GM will provide fuel-cell technology to Nikola’s heavy-duty (Classes 7 and 8) trucks. GM CEO Mary Barra commented that the company is “growing our presence in multiple high-volume EV segments while building scale to lower battery and fuel cell costs and increase profitability.”

Nikola will retain the Badger brand and be responsible for sales and marketing of the pickups that were announced in February and will be introduced in December. Production of the trucks is expected to begin in late 2022 at an as-yet-undisclosed location.

Last month, Volkswagen announced that it is opening a new engineering and planning center near its plant in Chattanooga, Tennessee, and that by 2022 the company plans to be producing EVs for the U.S. market on its modular electric drive platform. VW will be taking orders for its ID.4 electric SUV later this month and already has begun production of the vehicle in Germany and pre-production in China.

GM couldn’t wait much longer before doing something to shorten its development period. Tesla Inc. (NASDAQ: TSLA) has scheduled a Battery Day later this month and CEO Elon Musk has been teasing manufacturing improvements at the company’s new Gigafactory, currently under construction in Germany. While those are not strictly battery related, some analysts also are expecting announcements on battery life and range.

Nikola’s stock traded early Tuesday morning at $46.90, up about 32%, in a 52-week range of $10.27 to $93.99. The consensus 12-month price target on the stock is $55.00.

GM traded up about 6%, at $31.86 in a 52-week range of $14.33 to $39.68. The analysts’ price target on GM stock is $39.25.

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