Nikola has dropped it's suit against Tesla. The fact that it took so long after Mark Russel took over in mid 2020 tells me the company is a waste of perfectly good stationary. If Mark Russel had dust-binned the nuisance suit and committed all of his resources to producing electric trucks, Nikola might have had a chance to succeed. Now that claims and bravado are long past and we can see the company is vapour, they have a very steep hill to climb. It's difficult to imagine they could manage to stay in business for the next 10 years.
Buy the dip! Lol. I don't wish anything bad on Nikola. The current leadership inherited a dung sandwich made by Trevor Milton. Still, they have not demonstrated a familiarity with basic ethics and the whole place has been held together with string and tape since day one. Again, if they would have focused on producing a truck, it would have been a lot more hopeful. Those of us who have worked in a large corporation know how preoccupied with litigation an organization can become. It's all about injustice, anger, and conspiracy when the halls should be full of people beating their tools into weapons to put the best product into the marketplace they possibly can.
Nikola is now around 3 bucks. Quite a few of us who follow the EV industry knew this company was a piece of garbage for four years. It wasn't that difficult. The people who are holding the issue up at $3 are complete morons who haven't done the least bit of research on this company. The market cap is 1.287B. This company is wildly over valued, even if they do eventually manage to meet their goal of scaling to 2500 units of annual production in the current facility. The only way I am able to imagine someone giving $3 for a share of this pusher is if they look at the graph, see it is down, and equate it to Tesla because they both use electric propulsion. This company makes me reconsider my view on short term trading. There is a world full of suckers out there, waiting to be stripped of their money.
The current market cap of Nikola is 1.6B. Price $2.61. To date, they have raised 3.2B of funding. "Buy the crater"? I haven't followed Nikola for two years but noticed they just announced a hydrogen production operation. As much as I give zero respect to the idea of hydrogen powered cars or motorcycles, hydrogen fueled heavy haul trucks could be a thing for a while. Unfortunately, hydrogen is sensitive to the price of natural gas so it is pretty high, right now. This is not ideal for the up take of hydrogen powered trucks. Green hydrogen is a thing but it is quite inefficient. I recall reading of process development that will improve the efficiency of making green hydrogen by heating the water (possibly with solar) prior to electrolysis but those announcements went cold quite some time ago. I hope someone is still working on it. Total deliveries of the Tre were 111 at the end of 22Q3. I speculate they are probably approaching 150 by now. It appears they are starting to ramp. I never thought I would say this but if Nikola can stay on the path of not being a 3 ring circus and simply focusing on their business model, they do start to look interesting. If they can produce a few thousand trucks over the next five years and if they can bootstrap a hydrogen refueling network, they could be a decent little company. Nikola has absolutely zero technology. That was all dribble that leaked out of Trevor Milton's spit valve. Nikola is an assembler of trucks from Bosch components. There is no significant money in truck assembly operations. Not at their level. All I am saying is there may be a bit of money in hydrogen production operations. Further, if they can create a little hydrogen truck community with both tractors and fuel, they might be able to create a decent business. It wouldn't be a world killer but it might be worth something close to it's market cap at the new lower valuations. Tesla has no need of concern from Nikola. Fuel cells are not the long term future but they may be part of the short term for heavy hauling and certainly for aviation. Speaking of Trevor Milton, I would like to hear that he is going to jail but he is still walking the streets, telling people he is "... definitely NOT guilty of anything."
To be clear, I am aware Nikola is building battery powered trucks. I simply ignore them as irrelevant. This is a tough position to defend but I do cling to it. If there was a truck charging network with an open source connector, battery would be an obvious choice over hydrogen. When the MegaCharger network is more built out, it will make no difference to Nikola. We know all other EV manufacturers will continue ignore Tesla, pretending they don't exist, even if Tesla open sources their connector (very likely). In fact, that will be further justification to try something completely different. There is a market for "anything but Tesla". I am *not* tipping Nikola to be a big player at any point in the future. I'm just saying they might struggle their way to viability.
This is absolutely not, I repeat... *NOT*, a Nikola investor technology update video from a week ago. This isn't terribly high value video. I don't recommend watching it, unless you are an investor wanting to learn everything you can about the company. I felt bad for the CEO, having to announce features like the app which will allow an operator to flash the lights to find the truck in a yard or unlock the doors using a phone. This is a pretty standard truck with an infotainment system and a fuel cell.
There was a spotting of the Univar Solutions truck a few days ago but I believe this is a white truck that was delivered a while ago and has now been wrapped to match their custom trailer. Nikola fanbois mention three spottings of Tesla semis being towed last week, while there are quite a few Tre that have been delivered and are currently hauling. I'm not sure why there is so much Tesla hate in that group. Perhaps they believe Nikola is in competition with Tesla?
That is 95% of the reason this company is interesting. If you could buy in when the market cap is around $1B, you would have a pretty solid shot at riding it up to a 5B market cap. They will probably dilute a couple of times during that period so it won't be 5x but there does appear to be upside potential. I've been following it with an eye to determine if they have the capability to launch a network of hydrogen fuel stations. If they can pull it off without being distracted, they might do well.
At this point, I would say there is a 1% chance of me buying Nikola and perhaps a 2% chance of me buying Tesla. Surprised? Imagine how I feel. Tesla continues to do a ton of great, world beating, things. Why then am I interested in this piece of crap? Nikola has negative franchise value. That is to say, I believe most people would pay more for a brand they have never heard before, rather than buy a Nikola which they associate with a rabid dog orgy. Negative franchise value is an opportunity. It is possible to turn this ship around. They have no no technology, little production, and a lot of overhead, and a name that connotes scandal. If they can boot strap a hydrogen production facility and get it remotely close to viable, they can change the company name as part of rebranding to represent their clean power cycle and they could have a bright future. This could be an opportunity. I will be watching.
OK. To be more objective about this. Nikola is about to start production of their hydrogen truck. They announced it would happen in September 2023 so it may have already started but I am skeptical it is anywhere near production state. I'm sure they have a couple of frames propped up on 55 gallon drums and a few guys in blue overalls walking around. A small number of trucks will likely appear before year end but I highly doubt the production floor looks anything like a NASCAR pit stop. Hydrogen is not a long term solution to clean air transportation. It probably has a niche application in the heavy haul trucking industry, at least for a while; likely significant enough to justify a cardlock hydrogen network. The real hydrogen need is aviation. For me, any bet on Nikola pivots on the HYLA network. If they can sell hydrogen to the aviation industry, that would be more significant than anything they are likely to make happen in the logistics sector over the next 10 years. Hydrogen aviation is on the horizon. This stock does not need widespread adoption of hydrogen fuel. It just needs the promise of adoption and perhaps a supply contract or two with major players. I recall reading Nikola sold some or part of the HYLA division but I can't find any news about it with a Google search. Perhaps it is a false memory? Whatever the case, I see Nikola's future as 100% dependent on being a hydrogen fuel supplier, not a truck builder. Building trucks is how they will attempt to tread water until the real game starts.
Trevor Milton sentenced to 4 years in prison on two counts of wire fraud and one count of securities fraud. This is on top of the $165M damages he has to pay to Nikola. What about damages to investors? It's difficult to get a current net worth for Trevor Milton but he is still an extremely wealthy man. I suspect most people would happily trade a couple of years of their life (he isn't going to do all 4 years of the sentence) to gain dynastic levels of wealth for themselves and their family. It's a shame that crime pays so well. If it didn't, perhaps there would be less of it?
