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Hydrogen drive: After IPO: that’s behind Tesla competitor Nikola Motors | message


• To the top with innovation
• Nikola with a successful IPO
• Investors take a high risk

Nikola Motors overtakes Fiat

Nikola Motors, a startup whose stock market valuation has overtaken that of Ford and Fiat Chrysler, has not yet generated any sales.

The startup develops trucks with a hydrogen-powered engine. This concept currently allows shareholders to invest on a large scale, which has increased the company’s value to approximately $ 19.47 billion (closing price on July 13). For comparison, Fiat has an enterprise value of around $ 15.8 billion.

“I wanted to say that all my adult life; Nikola is now worth more than Ford and Fiat. And is on the heels of GM,” as Nikola founder Trevor Milton recently announced on Twitter.

In view of the actual stock market valuation, this statement is still a dream of the future and does not correspond to the truth. Ford’s market capitalization of around $ 24 billion is ahead of Nikola and General Motors is also significantly ahead of the startup with a market capitalization of $ 35.43 billion.

Successful IPO

Nevertheless, Nikola Motors is already being traded as a Tesla competitor.On the one hand, the startup – like Tesla – most likely based its name on the inventor Nikola Tesla, and on the other hand the manufacturer also relies on sustainable and innovative technologies for its vehicles. The similarities do not stop here, Tesla also enjoyed a relatively high stock valuation from the start, which always developed positively despite relatively low sales.

Nikola Motors did not actually enter the market as a direct competitor to Tesla. While Tesla develops and produces electric cars, Nikola relies on hydrogen-powered trucks for commercial use as well as pickups. But the company’s successful IPO appears to be Tesla’s CEO Elon Musk to make his group’s market position fear. Because just a few days after the Nikola IPO, Musk announced the mass production of the Tesla Semi, as Reuters reports. The semi is a truck.

Musk seems to have started the race for supremacy in the market for sustainably operated trucks. It will be shown in the coming years whether the hydrogen drive will prevail against the Tesla electric motor or vice versa.

The company, founded in 2014, merged with VectolQ in March 2020 to ultimately count as a public limited company. On June 4, 2020, Nikola went public with a starting price of $ 35. After just a few days, the stock reached an intermediate high of $ 88 – an increase in value of over 100 percent.

The startup hopes that the IPO will provide additional funds for the infrastructure expansion of hydrogen filling stations, which will be built with the help of the hydrogen company Nel. In addition, the production of the trucks is to be accelerated.

Gambling with hydrogen

Similar to Tesla, Nikola Motors has set itself the goal of setting new standards in the mobility sector. The startup’s ambitions are further supported by the longer-term hype surrounding hydrogen energy. Barclays experts predict a trillion market for this segment, which will develop by 2050.

However, this forecast and the associated investment in the startup is associated with high risk. It can be said with a relatively high probability that hydrogen will play an important role in the future, but in what period of time this will be the case and, above all, which company will ultimately emerge as a big winner, cannot be said at the present time.

Nikola Motors is viewed by analysts as a promising company, but the start-up’s ambitions to mass-produce trucks with an electricity-hydrogen drive have so far been largely theoretical.

The first vehicles are scheduled to come onto the market in 2021. Nikola has already received 14,000 orders that would generate sales of ten billion euros, but the vehicles still have to be produced. Before the second half of 2021, pre-orderers probably cannot hope for delivery.

According to this, experts classify Nikola as a high-risk investment, the extraordinary return is associated with a high risk factor. An unprofitable company with significant price increases is nothing unusual per se, but this phenomenon is even more pronounced at Nikola Motors.

Henry Ely / editorship

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Image sources: Nikola

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