Nikola Motors holds the potential to shake up the heavy-duty trucking industry with its hydrogen fuel-cell based big rigs. Previously a private company, a recent merger has taken the company public and investment is now available to everyone.
Nikola Motors Company Profile
Like Tesla, the company is named after Serbian-American inventor Nikola Tesla. That’s not where the similarities between Nikola Motors and Tesla end, however. Nikola Motors also has as its CEO and founder a billionaire who is passionate about what he is doing. Nikola Motors was founded in 2014 in Salt Lake City, Utah by Trevor Milton.
Nikola Motors is a global leader in the design of BEV (Battery Electric Vehicle) and FCEV (Fuel Cell Electric Vehicle) class 8 semi-trucks. In addition to designing and developing these futuristic vehicles, the company also sees itself as an energy-tech company.
The company first began developing a turbine-electric hybrid truck, but then pivoted to using hydrogen fuel cells after the prototype was built. Since that time, Nikola Motors has been committed to fuel-cell technology. In addition to its trucks, Nikola has also developed prototypes for various other types of vehicles including all-terrain (ATVs) and utility task vehicles (UTVs).
Nikola Motors Stock
Through a merger with VectoIQ (NASDAQ:VTIQ), Nikola Corporation announced on March 3, 2020, that it would be listed on the NASDAQ. Once the transaction closes, the combined company will be named “Nikola Corporation” and the NASDAQ symbol is expected to change to “NKLA.” This presence on the NASDAQ will allow much greater access to potential investors who see Nikola Motors as the next Tesla—with great potential to do for heavy-duty transport what Tesla promises to do with the electric car. The merger is expected to officially close in early June 2020.
You can see below that the VTIQ stock was extremely flat until the merger was announced, causing the stock to shoot up from around $10 to $35, before settling back at $22.62.
The combined company will have cash from VectoIQ’s trust account, which held around $238.4 million as of March 31, 2020. In addition, the combined company is working to raise $525 million in a private placement from several institutional investors, one of which is Fidelity.
In an appearance on Fox Business Channel, Nikola Motors CEO Trevor Milton said that the company recognized that garnering private investment was becoming very difficult. The company now wants to go public and allow complete transparency to make investing in the company easier because “the public was dying to buy stock into Nikola.”
Also, in the appearance, Milton stated that, in seven years, Nikola would be the largest energy consumer in the world. The company is currently in the process of building 700 hydrogen stations across America. These stations will not only fuel Nikola trucks, but also those of the company’s competitors.
In March 2019, land was acquired in Coolidge, Arizona to make room for a truck factory, headquarters, and R&D center. The company expects full production out of this facility by 2023—producing 35,000 units per year with the capability to expand to 50,000 if needed.
It makes sense to focus on hydrogen fuel-cell technology with big trucks as opposed to cars because the fuel cells which hold the compressed hydrogen gas are bulky. Since big rigs are heavy anyway and commercial vehicles tend to be more heavily used and in need of refueling more often, this delivers more value to the customer per vehicle. It seems that Nikola has its focus in the right place. While Tesla also has the all-electric Semi in its pipeline, Nikola stands out for its commitment to the hydrogen fuel cell.
Nikola Motors and its founder, Trevor Milton, symbolize the same characteristics as many iconic tech companies. They are committed to a goal they are passionate about and are not afraid to completely change course when they realize they are wrong. Nikola did this when it switched from a turbine-electric hybrid truck to hydrogen fuel cells. The company’s commitment to hydrogen fuel cells has persisted from that time. Being passionate about the goal and unwavering in the attempt to find the right solution are key attributes necessary for success in the near future, where technological growth will be both exponential and transformative.