Nikola is a Hybrid Truck Company with headquarters in Phoenix, Arizona. Led by Trevor Milton at the helm, this American company debuted with plans to make hydrogen cell-powered heavy-duty trucks and piqued much interest in the heavy vehicles market. Nikola was valued at around USD 3Bn when it was launched at NASDAQ in 2019.
Current Market Valuation of Nikola
The current valuation of the company is USD 26.3Bn with the shares skyrocketing regularly. This company expects around USD 10Billion in revenue from 2021 when it begins to fulfill the orders for its trucks. The latest jump in the stock prices happened when Trevor tweeted that it is taking reservation orders for its Zero Emission truck, dubbed Badger.
Who are the customers of Nikola ‘s Zero Emission Trucks?
One of its current customers includes the leading brewing company Anheuser-Busch (AB-InBev) has booked 800 Zero-Emission trucks which are expected to be fulfilled sometime around 2021. In its filing, Nikola has projected that it will have at least 7000 battery-powered units and 5000 Hydrogen cell powered units either sold or leased out by 2024.
As per reports, the firm is expecting 80% of its revenue from Zero Emissions Hydrogen Fuel Cell trucks and the rest 20% from electric cell vehicles. The firm has maintained a technology-neutral stance as to how the electricity used for charging these vehicles get generated in the first place.
Is Trevor Milton’s Nikola a direct threat to Elon Musk’s Tesla?
Trevor is betting on both electric and hydrogen cell-powered vehicles as part of Nikola’s product portfolio whereas Elon’s Tesla is fully focused on Electric trucks. Elon has a lot going on from his side, with the latest SpaceX launch to ISS becoming a historical moment for his company.
The other way to look at this situation is Tesla beating Nikola’s product with experience and proven reliability with its existing product portfolio and customer following. We can’t comment on Nikola’s product success and reliability until 2021 when it starts delivering these orders.
Difference between Hydrogen Fuel-Cell Vs Electric Cell and which is preferred?
Hydrogen Fuel cells generate electricity as part of a chemical reaction when Hydrogen and Oxygen are combined to form water vapor, a harmless byproduct. When this technology is fitted in vehicles, the hydrogen is supplied from tanks (similar to fuel tanks in current IC vehicles), and oxygen is taken from the atmosphere. The hydrogen tanks can be refueled as fast as Diesel or Gasoline fuel. Another interesting fact to note is that the Hydrogen Fuel cells are lighter than electric cells or batteries.
Challenges stacked against Nikola
The biggest challenge faced by Nikola is similar to what Tesla faced earlier. With both hydrogen fuel cell and electric cell vehicles, there is a need for associated infrastructure as well which includes refueling stations and maintenance service stations. This needs to be built across the country which poses a problem in terms of both investment and speed to scale. Nikola is planning to build a network of 700 truck stop-size hydrogen fuel stations across the US and Canada by 2028.
Traditionally, Hydrogen gas is produced by conventional fuels. However, Trevor has mentioned that the fuel stations would be powered by renewable power sources. Each dispenser at the station will be fitted with the capacity to fuel up a Hydrogen Fuel-cell truck in about ten minutes.
So What’s next for Trevor Milton?
Trevor has a lot of hopes riding on him for the next few years where he has to prove the firm’s viability to both its shareholders and its customers. With Tesla being a strong opponent and multiple bear bets happening against the firm in the stock market, we can for sure tell that Trevor has his hands full at the moment. Until then, we can only wait and watch.
