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Nikola Corp. isn’t turning out to be the next Tesla that investors—and General Motors—were hoping for.

The electric-vehicle startup put its eye-catching “Badger" pickup-truck project on ice Monday as part of a radically shrunken version of its deal with GM. All that is left of the original agreement signed in September is a plan for GM to supply Nikola with fuel-cell technology for U.S. big rigs.

Detroit’s biggest auto maker had planned to take an equity stake in Nikola in exchange for building the Badger under contract. But the deal has been in doubt almost from the start after a hedge-fund report detailed the limitations of Nikola’s technology, leading to the resignation of founder Trevor Milton.

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GM won’t sell Nikola fuel cells soon. For all its fanfare about hydrogen, the startup is currently focused on battery-powered versions of its first electric truck, the “Tre." It hopes to start full-scale production in the fourth quarter of next year in Germany and in early 2022 in Coolidge, Ariz. Hydrogen trucks won’t come before 2023, and in Europe Nikola is using Bosch as its fuel-cell supplier.

Nikola is still considering whether to use GM’s battery technology for the Tre rather than that of its existing partner, California-based Romeo Systems. For GM, earning extra revenue from its vast battery investments would be a more meaningful win, building on its plan to supply Honda, but it is unclear how much business is at stake. Nikola hasn’t yet started taking orders for the Tre.

Nikola stock fell by over a fifth Monday morning. The company shot to attention in June when Mr. Milton tweeted about taking orders for the Badger and a wild rally in the shares briefly put its market value on a par with Ford’s.

The temporary closure of the Badger chapter takes the company back to its original pledge to reinvent long-distance trucking. This holds speculative promise some years down the road, but it makes comparisons with Tesla harder to justify.

Nikola’s market value is now less than a quarter of Ford’s. That is still high for a company that doesn’t have meaningful sales.

Daimler and Toyota took stakes in Tesla in its early years, but sold out too early. GM’s unusual equity deal with Nikola may have been motivated by a desire not to miss out on another electric-vehicle success story. But making cars is hard and Tesla could well be the exception, not the rule, in the industry shift to electric vehicles. The odd thing is that GM had to learn the lesson, too.

This story has been published from a wire agency feed without modifications to the text.

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