Summary List Placement
Nikola was at the forefront of the handful of electric-vehicle startups that have gone public this year before making their first deliveries. Though such a move creates upside for investors, it also carries uncertainty around whether those companies will be able to execute on their plans and find enough customers willing to take a chance on them.
Nikola’s newly announced $2 billion partnership with General Motors eliminates much of that uncertainty, Wedbush Securities analysts Dan Ives, Strecker Backe, and Ahmad Khalil said in a research note published on Tuesday.
“This news is a huge shot in the arm for Nikola,” the analysts said. “There have been many skeptics around Nikola and its founder Trevor Milton’s ambitions over the coming years, which now get thrown out the window with stalwart GM making a major strategic bet on Nikola for the next decade.”
Under the deal, GM will engineer and build Nikola’s Badger electric pickup truck, supply future Nikola vehicles with its hydrogen fuel-cell system, and take an 11% stake (worth $2 billion) in the startup. Nikola, which designed the Badger, will handle sales and marketing. GM said it expects to net $4 billion from the deal, while Nikola estimated savings of over $5 billion.
Hydrogen-powered semi trucks are the core of Nikola’s business, but founder and executive chairman Trevor Milton has said he envisions the Badger as a way to make the company more attractive to investors, since most won’t drive a semi truck.
“The reason why people love Apple: Everyone touches their product. Why do they love Google? Everyone touches their product,” Milton said during a July interview with the “This Week in Startups” podcast. While semi trucks will drive Nikola’s profits, Milton said, “the pickup truck’s for the consumer. And the consumer is the one who is part of the Robinhood portfolio, who’s part of the family office or whatever. And that’s where all the valuation of the company comes from.”
Are you a current or former Nikola employee? Do you have an opinion about what it’s like to work there? Contact this reporter at email@example.com, on Signal at 646-768-4712, or via his encrypted email address firstname.lastname@example.org.
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Source:: Businessinsider – Tech