It’s Nikola, Not Tesla!
Nikola Tesla was an important engineer and futurist in the seventeenth century. Elon Musk honoured him by naming his electric car brand, ‘Tesla,’ and it’s not taken long for ‘Nikola’ to get registered either by a different entrepreneur.
This time, it’s for an electric truck brand, but few people know the dude behind it, Trevor Milton, like they do Elon Musk. He’s come out of nowhere, pre-revenue having not sold a single truck yet, but with a multi-billion-dollar initial public offering. Ahem?
“We have a lot of money in our account,” he said on television last week (quelling any need for further analysis). “We still need more money, though (of course), but when you hit your benchmarks, investors just open up their pocketbooks!”
Milton and Nikola are dividing the bulls and bears. It’s still the hardest thing to do in business – start an auto brand – but electric pickups could be a niche with hope.
Thus far, the comments he’s made aren’t like Elon’s inspiring words about a better future for the human race. The skeptics say this is just a smart businessman doing a smart thing at a smart time – tapping the stock market for quick cash with a too-good-to-be-true “next Tesla” cult stock in the making. But we need to give him the benefit of the doubt.
We do want eco-trucks instead of diesel-trucks, don’t we?
Trevor Milton has been planning Nikola since 2015. He wants to show us the ‘Badger’; a “real operating truck” (i.e. the wheels turn), “4×4, stamped metal panels, functioning interior etc.” The trucks are battery-electric and hydrogen-electric, and $10 billion in cancellable pre-orders is already in the book. They now need a manufacturer.
Elon Musk remains silent. He and Milton don’t know each other, but they’re competitors now. If you’re an investor in Tesla, you should feel fantastic about the parallel opponent. It will speed up work on the Cybertruck, and the forces behind Nikola’s success or failure will help inform Tesla of opportunities and risk factors as well.
This could be the best or worst thing markets have seen in years, but sentiment right now says “best.” Nikola stock soared over 100% at its initial public offering, valuing the company at about the same as Ford!
20% of the open float is short-sold, but be aware of the Italian Agnelli’s who own traditional truck firm, CNH. These folks have pumped money into Nikola so far to keep it going. Trading had to be paused yesterday due to insane volatility in the stock price, so beware of that, too! We’ll be hearing a lot more about Nikola in the coming months!