The market likes what it sees in electric and hydrogen powered automaker Nikola, at least in day one of being publicly traded.
Shares of Nikola debuted on the Nasdaq Thursday under the ticker symbol ‘NKLA’. The stock popped about 7% in early trading action. Nikola didn’t undergo a traditional IPO process. Rather it merged with a special purpose vehicle called VectoIQ Acquisition Corp.
Prior to its debut on the Nasdaq, the company — founded by serial entrepreneur Trevor Milton — was valued around $3.3 billion after several funding rounds by prominent names such as ValueAct, Bosch and Wabco.
Milton isn’t shy on the potential for his company to change a trucking industry still reliant on fossil fuels. And if he could pull it off over the next decade, early big-name investors like Jeff Ubben at ValueAct have suggested Nikola may be worth at least $100 billion.
“How you get there is because we vertically integrated the entire supply chain. It’s very similar to Amazon,” Milton explained on Yahoo Finance’s The First Trade on why the business could be worth $100 billion. Nikola’s model is interesting to say the very least. It partners closely with truck manufacturers and essentially gets paid for its R&D prowess on battery technology and design. Nikola then leases its eye-catching semis — and the service — to companies.
Nikola plans to have its first electric-powered semi-truck out on the market in 2021 (likely before Tesla’s Semi) with hydrogen-powered options following in 2023. Its first round of charging stations will debut in California next year. The company has lost close to $200 million since inception. But, Milton tells Yahoo Finance orders are far more than the most recent disclosure of 14,000 valued at $10 billion.
“We stopped taking orders for a period of time. Ultimately what happened fleets were told the trucks were going to be five years out. That’s too far to plan. Once we hit about $10 billion in orders, we were making people mad. If we were to open all those orders’ books up right now with all the people that have said hey, we want these trucks, you would see a much, much, much higher number than that,” Milton added.