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The inventor of various conceptual zero-emission vehicles Nikola ($ NKLA) had troubled weeks with as low point the resignation of chairman Trevor Milton, after he was accused of fraud and sexual abuse. The company now seems to be heading for an all-or-nothing-situation, where uncertainty has a visible effect on its share price. The share closed a whopping 7.4% lower to $17.88 on September 29. This is the lowest close of the share since Nikola went public on June 4.
Nikola has therefore published a new statement to highlight key elements of the company’s strategy and vision, while continuing its drive to become a global leader in zero-emission transportation. The company, in conjunction with its business partners and suppliers, aims to visibly reduce execution risk, improve commercialization timelines and build long-term competitive advantages. These business partners have shared knowledge and invested capital, which means that they are closely involved in Nikola’s strategic plans. Obviously they expect something in return from Nikola in the future. These include companies such as: Nel Hydrogen, Bosch Group, CNH Industrial NV and Hanwha Group.
One of the biggest automotive companies would have liked to join Nikola’s activity, none other than General Motors ($GM). Where the companies had previously signed a cooperation agreement, General Motors announced on September 29 that it wanted to abandon the agreement with Nikola. The companies are still in talks about the possibilities, but the predictions are far from encouraging, given the $2 billion deal that is faltering. Once this is definitely off the track, it will leave a gaping hole. The partnership would give the Detroit automaker an 11% stake in Nikola. Shares have fallen by more than 60% since the deal’s announcement, making the company much less attractive to General Motors.
The Board of Directors currently consists of a number of individuals from the strategic business partners and suppliers. Bosch Group plays a significant role in this, where it previously led Series B and C private investment rounds and jointly filed patent applications with Nikola for batteries and fuel cell technologies. Most hope now appears to be on the first batch of five prototypes of the Nikola Tre, which will be substantially completed at the JV facility in the near future.
Before all the uproar, the company had already forecast that it won’t be profitable before 2023, and those green numbers will undoubtedly be pushed back if the company is to maintain its goals. And that in an industry where there are competitors who earn more than $100 billion in annual sales. The stock ended its last trading day at $17.88, now approaching the previous September 20 low of $16.15. From a technical point of view, the risk of further losses is not inconceivable. Today the share appears to be climbing – around 5% – after the company announced its vision for the future. Hopes for now seem pinned on a possible agreement between Nikola and General Motors and a new wind that will blow through the company and its activities.
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