skip to Main Content
enquiries@thearmchairtrader.com

Sign up for our Free Daily Digest newsletter: Actionable insight every morning, designed for the self-directed investor. Find out more

Investor interest in the start up electric trucks venture, Nikola Motor Company (NASDAQ:NKLA), is fierce. The company has come to NASDAQ thanks to a reverse merger with VectorIQ which is already listed. VectorIQ is a cashed-up shell company with a mission to acquire new ventures in the smart mobility and electrification space.

Shares in VectorIQ are being converted into Nikola Motor Company stock.

The coming of the hydrogen-powered long range truck

The company is looking to develop hydrogen powered and electric battery trucks. It could stand to transform the way that road haulage works. With this deal in place, Nikola Motor Company can focus on truck production and potentially position itself as a leader in this market.

Investors will not have missed the fact that Nikola is the first name of Nikola Tesla, the 19th century Croatian inventor who emigrated to the United States to pursue his vision of electricity and a revolutionary new power source that could change the world.


Nikola Motor Company is understood to be planning a manufacturing facility in Arizona and has already received orders for its projected range of trucks. These will have a range of between 500 and 750 miles and produce up to 1000 horsepower. According to Trevor Milton, its chairman, this range could be the most advanced commercial trucks the world has ever seen.

There is already considerable interest in the vehicles from across the road haulage industry, including from manufacturers like IVECO and FPT Industrial. These companies are looking into the developmment of a smaller truck that would be suitable for European roads. CNH Industrial, which owns both IVECO and FPT Industrial, has taken a $250 million stake in Nikola Motor Company as a Series D investor.

These are zero emission, hydrogen fuel cell trucks that only produce water as a by-product.

Shares in VectorIQ, now re-branded Nikola Corp, are already on a spectacular run as investors pile into the company. Stock was trading at $35 on Friday but has hit $54 since the NASDAQ opening this morning.

What’s our take on Nikola Motor Company?

There is going to be a lot of investor interest in this stock. It seems to be catching the imagination in the US investor community, as it looks like a viable complement to the success of Tesla’s motor vehicles. The haulage industry in both Europe and America is going to need a solution that does not belch diesel fumes.

We at The Armchair Trader have always liked business stories which we feel have the legs to take part in what is going to be an enormous and rapid switch from fossil fuel energy to electric (see our coverage on Nano One). Nikola Motor Company is already well down the road towards having a production line with actual vehicles being delivered to buyers. The company has said that it expects to be generating revenue by next year when it rolls out its Nikola Tre Class 8 truck.

Anheuser-Busch has already placed an order  for 800 trucks and US Express is also understood to have submitted a massive order. Such is the enthusiasm from the haulage sector, the projected factory would be working overtime as soon as it comes online.

Sign up for our Free Daily Digest newsletter and get updates every weekday morning.

Share this article

Sign up to our Daily Digest newsletter and receive our latest insight every morning

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

Comments

This Post Has 0 Comments

Leave a Reply

Your email address will not be published.

Back To Top