What’s got no wheels and a market cap of $28bn? Answer: the Nikola Motor Company. Named, coincidentally no doubt, after the same person as its rival Tesla Motors, Nikola came to the market in early June and within a few days had a market capitalisation greater than that of Ford despite the fact that it hasn’t produced a single vehicle yet. Unlike Tesla (Motors that is), Nikola is focussed on producing trucks. Its large, class 8 vehicle (articulated truck, to you and me) is specifically aimed at competing with Tesla’s “Semi”, though a key difference between the two is that Tesla’s truck is battery powered whereas Nikola’s is powered by a hydrogen fuel cell. Neither are yet in production but both companies have powerful backers – Elon Musk in the case of Tesla and South Korea’s Hanwha Group in the case of Nikola.
Coincidentally, Nikola’s IPO occurred almost ten years to the day after Musk floated Tesla at a price of $17 per share. After smashing through the $1100 per share barrier this week, Tesla’s market cap of $208bn has now surpassed that of the world’s (previously) largest auto company, Toyota, which produces 10 million vehicles pa compared to Tesla’s target of 0.5 million cars this year. Ironically, most of these are still produced in Toyota’s old factory in Fremont, California which Tesla purchased in 2010.
Finally, striking a counterpunch for the internal combustion engine, Ford unveiled the long-awaited fourteenth generation of its F150 pickup truck, the flagship vehicle of its F Series range which has been the best selling pickup in the US since 1977, generating over $40bn of sales annually. With such a lucrative market to aim at, it isn’t surprising that the new kids on the block have their eyes on this segment too. In November last year, Musk unveiled Tesla’s prototype Cybertruck, though the most memorable part of the launch was when its chief designer smashed the truck’s supposedly unbreakable windows.
Not to be outdone, Nikola announced that it was allowing those people who had been “anxiously awaiting” the opportunity to give the company $5,000 to preorder their entrant into this space, the Nikola Badger. Despite the fact that Nikola haven’t even demonstrated a working prototype of the Badger (all that these “customers” are going on is a few drawings) the company’s share price rose 6%.
Battery powered Scotch mist anyone?
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