Nikola to acquire EV battery firm Romeo Power for in-house prowess
Clean mobility and infra firm Nikola Corporation has announced the acquisition of California-based battery tech firm Romeo Power. This move will help the company secure control of critical battery pack engineering and production processes to address the emerging demand for EVs in the coming years.
Nikola claims that the transaction for acquiring Romeo Power is expected to yield an annual cost savings of up to $350 million by 2026, and reduce non-cell related battery pack costs by 30-40 percent by the end of 2023. Romeo's manufacturing facility in Cypress, California will become Nikola's Battery Center of Excellence, the company adds.
"Romeo has been a valued supplier to Nikola, and we are excited to further leverage their technological capabilities as the landscape for vehicle electrification grows more sophisticated. With control over the essential battery pack technologies and manufacturing process, we believe we will be able to accelerate the development of our electrification platform and better serve our customers," said Mark Russell, Nikola's Chief Executive Officer.
"Given our strong relationship with Romeo and ongoing collaboration, we are confident in our ability to successfully integrate and deliver the many expected strategic and financial benefits of this acquisition. We look forward to creating a zero-emissions future together", he added.
Romeo is focused on designing and manufacturing lithium-ion battery modules and packs for commercial vehicle applications. As Romeo's largest customer, Nikola believes that the acquisition will allow for significant operational improvement and cost reduction in battery pack production.
The addition of Romeo's battery and battery management system (BMS) engineering capabilities are also expected to support accelerated product development and improved performance for Nikola customers, the company opines.
Robert Mancini, Romeo Power's Chairman of the Board of Directors, said, "As Romeo's largest customer, Nikola has been a cornerstone of our development and growth, and this is a natural evolution of our relationship. Our products provide critical energy density important to heavy-duty vehicles, combined with safety performance and battery management software".
"Following an extensive review of alternatives, we firmly believe that this combination offers the best opportunity for Romeo shareholders to participate in the ongoing value creation at a larger scale, stronger combined company. It is exciting to see Romeo joining the Nikola family", he added.