American engineer Nikola Tesla, who invented the alternating current and died in 1943, certainly could never have imagined that he would become a market favourite more than 70 years after his death. But now his name describes a famous brand of battery-powered electric cars. His first name, Nikola, is also quite popular on Wall Street these days.
Created only six years ago, US start-up Nikola Corporation develops hydrogen-powered electric lorries. It went public on 4 June via its merger with VectolQ, which has been on the NASDAQ since 2018. It was a stunning debut. Five days after the IPO, on 9 June Nikola’s capitalisation exceeded 34 billion, which was more than Ford's capitalisation (30 billion), before falling to 13 billion currently.
This valuation is even more impressive considering that the company has never sold a single lorry. Nikola is garnering keen interest because it produces hydrogen-powered vehicles and many observers think it will be the future Tesla. However, the Phoenix-based start-up has adopted a strategy that is very different from its prestigious competitor.
Whereas Tesla and its ebullient CEO Elon Musk have always taken pride in doing everything themselves, Nikola works with many partnerships. For the fuel cells that will power its vehicles, Nikola’s supplier is German group Bosch, which has been a stakeholder in Nikola since 2019. For electrolysers, which produce the hydrogen that will be supplied to filling stations, the start-up announced on 3 June that it had placed an order with Norwegian group NEL.
And for the body of its lorries, Nikola has partnered with Italian holding company CNH, which is both a stakeholder in Nikola and the owner of the brand Iveco.
Another notable difference is that Nikola isn't exclusive. While the start-up is primarily focused on hydrogen, it also develops batterypowered electric models. The Nikola Tre, which is actually a re-branded Iveco lorry, will run on batteries, while the company’s two other articulated lorries (Nikola One and Nikola Two) will be hydrogen-powered.
The start-up confirmed that it already has 14,000 pre-orders for its hydrogen lorries – equating to approximately $10 billion in revenue. US beer giant Anheuser-Busch has ordered 800 of them. But these models won't be available until 2023. Nikola’s catalogue also includes the Badger, a hydrogen-powered pickup. This could irritate Elon Musk, who also has a pickup in the works – the Cybertruck with a futuristic design – and an articulated lorry named "Semi", and both are battery-powered vehicles. In June, the Tesla CEO told his teams to accelerate the development of the Semi, which is expected to be available in 2021. But the competition doesn't come solely from Tesla: Toyota and Hyundai, two hydrogen pioneers, are ahead of the game.