INVESTMENTS IN AFFILIATES

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investments in unconsolidated affiliates accounted for under the equity method consist of the following:


			As of
	Ownership		March 31, 2022		December 31, 2021
Nikola Iveco Europe GmbH	50	%	$	4,921	$	4,083
Wabash Valley Resources LLC	20	%	57,713		57,695
			$	62,634	$	61,778

Equity in net loss of affiliates on the consolidated statements of operations for the three months ended March 31, 2022 and 2021, was as follows:


	Three Months Ended March 31,
	2022		2021
Equity in earnings (loss) of affiliates:
Nikola Iveco Europe GmbH	$	(2,838)	$	(794)
Wabash Valley Resources LLC	18		—
Total equity in net loss of affiliates	$	(2,820)	$	(794)

Nikola Iveco Europe GmbH

In April 2020, the Company and Iveco established a joint venture in Europe, Nikola Iveco Europe GmbH. The operations of the joint venture are located in Ulm, Germany, and consist of manufacturing the BEV and FCEV Class 8 trucks for the European and North American markets.

The agreements provide for a 50/50 ownership of the joint venture and a 50/50 allocation of the joint venture's production volumes and profits between the Company and Iveco. Nikola Iveco Europe GmbH is considered a variable interest entity ("VIE") due to insufficient equity to finance its activities without additional subordinated financial support. The Company is not considered the primary beneficiary as it does not have the power to direct the activities that most significantly impact the economic performance based on the terms of the agreements. Accordingly, the VIE is accounted for under the equity method.

During the three months ended March 31, 2022 the Company made a contribution to Nikola Iveco Europe GmbH of 3.0 million Euros (approximately $3.3 million). As of March 31, 2022, the Company's maximum exposure to loss was $16.6 million, which represents the book value of the Company's equity interest and guaranteed debt obligations of $11.7 million.

Wabash Valley Resources LLC

On June 22, 2021, the Company entered into the Membership Interest Purchase Agreement ("MIPA") with WVR and the Sellers, pursuant to which, the Company purchased a 20% equity interest in WVR in exchange for $25.0 million in cash and 1,682,367 shares of the Company’s common stock. WVR is developing a clean hydrogen project in West Terre Haute, Indiana, including a hydrogen production facility. The common stock consideration was calculated based on the 30-day average closing stock price of the Company, or $14.86 per share, and the Company issued 1,682,367 shares of its common stock.

The Company's interest in WVR is accounted for under the equity method and is included in "Investment in affiliates" on the Company's consolidated balance sheets. Included in the initial carrying value was a basis difference of $55.5 million due to the difference between the cost of the investment and the Company's proportionate share of WVR's net assets. The basis difference is primarily comprised of property, plant and equipment and intangible assets.

The Company does not guarantee debt for, or have other financial support obligations to the entity and its maximum exposure to loss in connection with its continuing involvement with the entity is limited to the carrying amount of the investment.