eResearch | Nikola Corporation (NASDAQ: NKLA) is a designer and manufacturer of battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen fueling station infrastructure.
Nikola Merger with VectoIQ
On June 3, Nikola Corporation (NASDAQ: NKLA) began trading at US$34 after a reverse merger with VectoIQ Acquitision Corp., previously reported in eResearch’s April 17 article: Electric Vehicles Industry Update Q1/2020
VectoIQ was a publicly-traded special purpose acquisition company, headed by Stephen Girsky, former Vice Chairman of General Motors. A reverse merger consists of a transaction in which a private company purchases the control of a public company. As a result, both companies merge into one publicly traded company avoiding the costs and time consumed by a traditional initial public offering (“IPO”).
“Nikola is thrilled to complete the NASDAQ listing and be part of the ESG investment world. This is a significant endorsement in fuel-cell and battery-electric technology. Since Nikola launched its first fuel-cell semi-truck, you have seen the world rally behind hydrogen and follow our lead. What was once considered the fuel of the future is now accepted as today’s solution,” said Nikola’s Founder and Executive Chairman Trevor Milton.
Recent Financings
In September 2019, Nikola raised US$1 billion in a Series D financing, including a $250 million strategic investment from CNH Industrial N.V. (NYSE: CNHI).
During the recent reverse merger process, Nikola raised US$525 million at US$10 per share with a pool of investors including Fidelity Management & Research Company, ValueAct Capital Management and P. Schoenfeld Asset Management LP.
The proceeds will be directed to accelerate production of battery-electric vehicles (BEV) and hydrogen fuel-cell electric vehicles (FCEV), support the construction of Nikola’s manufacturing facility in Coolidge, Arizona, and continue its hydrogen station infrastructure roll out.
Revenue Forecasted by 2021
Although the Company does not expect revenues this year, it announced pre-orders representing more than $10 billion of potential revenue. Nikola forecasted revenue of US$150 million in 2021 and more than US$3 billion by 2024 from sales of 600 battery-electric trucks in 2021, and up to 7,000 battery electric trucks and 5,000 fuel cell electric trucks in 2024. The Company forecasts production of 30,000 fuel cell electric vehicle trucks by 2027.
“With our Nikola IVECO joint venture [with CNH Industrial] and over $10 billion in pre-order reservations, Nikola is positioned to be a wonderful story of how one company can literally change the world.”, said Nikola’s Founder and Executive Chairman Trevor Milton.
The New Nikola Badger
Last Monday, the Company saw its stock price double after Nikola’s Founder and Chairman, Trevor Milton, tweeted about opening reservations on June 29 for the Company’s new electric truck, the Badger.
“We open up reservations for the most bad ass zero emission truck on June 29th. See the @nikolamotor Badger in person at #nikolaworld2020 this year. You’ll get to see a real operating truck, not a fake show truck. Expect stamped metal panels, functioning interior w/ hvac, 4×4, etc” tweeted Trevor Milton, Founder and Chairman of Nikola.
His tweet followed a previous statement by the Company reporting it would need to partner with an established OEM to bring the Badger to market.
The hydrogen fuel cell trucks have the advantage of a quick refuel time. Refuel time should be similar to refueling a gas tank when compared to an hour or longer to charge an electric vehicle.
Moreover, Nikola plans to build a network of hydrogen fuel refilling stations across the US and Europe. The expansion of hydrogen fueling stations will serve customers’ fleets, such as Anheuser-Busch.
Since debuting at US$34, shares increased in price by over 175% and on June 9, Nikola’s market cap was higher than the Ford Motor Company (NYSE:F)’s market cap of $28 billion.
//
TABLE 1: Automobile Manufacturers by Market Cap (June 10, 2020)
