Batman v Superman. Yankee vs. Red Sox. Nikola Tesla vs. Thomas Edison. These are some of the greatest rivals ever.
Another rivalry is brewing in the grumbling field of electric trucks: Nikola vs Tesla.
Tesla (ticker: TSLA) is now the most valuable car company in the world, disrupting the entire automotive industry with its motorized cars. Nikola (NKLA) also has similar aspirations 10 years after Tesla’s debut as a publicly traded company – the most valuable trucking firm on the road.
Tesla is, of course, best known for luxury automobiles such as the Model S, which can retail for over $ 100,000. Nicola, for his part, plans to build large Riggs-heavy-duty trucks that share interstate highways with cars. But Tesla has plans for a battery-powered electric semi-truck for 2021 that will compete with the Nikola offerings. What’s more, both Nikola and Tesla are pure-sport electric vehicle manufacturers without the legacy of gasoline or diesel-powered transportation.
Tesla is an old company, generating billions in sales as well as bottom-line profit. Nicola does not plan to generate cash flow for a few more years. But Nikola has the upper hand over Tesla in one case: stock market valuations. Its shares are more valuable in the history of Nikola than in the history of Tesla.
Nicola came out of the gate valued at around $ 12 billion. Tesla was valued at approximately $ 2 billion after its initial 2010 public offering.
During its IPO, Tesla raised approximately $ 225 million in stock for $ 17 million. Since then, Tesla has repaid nearly $ 15 billion in debt over the past decade to build its electric-vehicle business.
Sales have grown from about $ 100 million in 2020 to $ 30 billion in that period. Tesla has a market value of about $ 2 billion to $ 280 billion.
Tesla took over about 5 years after its IPO date to cumulatively sell 100,000 vehicles. It took Tesla nearly 9 years to generate positive free cash flow.
Tesla’s heavy-duty truck will run on batteries. It has made some notable sales, including trucks for shipping to JB Hunt Transport Services (JBHT).
The batteries that power electric vehicles at this time are heavier than the Nikola hydrogen fuel cell, which includes the fuel weight, or diesel engine, and its fuel. Weight penalties limit long-term shipping opportunities. Weight is the enemy of big-riggers: it limits the amount of freight, which can limit revenue. But there are many heavy-duty truck applications, such as dredges (things around a port or warehouse), or low-truck-loading shipping, abbreviated as LTL, where weight is not an issue.
The Old Dominion Freight Line (ODFL) is a large LTL shipper. This Tesla Semi is not yet ordered.
Nicola has also signed on some blue-chip customers for its futuristic fuel cell trucks, including Anheuser-Busch InBev (BUD) —the beer manufacturer and distributor — that has ordered 800 trucks.
Nicola is debuting with millions of dollars on its balance sheet. The company has actually raised about $ 1 billion in the process of becoming a publicly traded company.
The company is not yet selling. They are not making trucks yet. An electric truck is scheduled to take off in 2021 and its hydrogen fuel cell truck will be going out in 2023.
Nicola is betting its future on low-cost hydrogen fuel. Apart from making trucks, it plans to produce and sell fuel. Nicola plans to generate cash flow around 2024 or 2025. It is now planned to spend $ 2.5 billion, building a manufacturing facility as well as hydrogen filling stations across the US.
The company will need more than what Tesla has cashed. It is likely that some fuel stations will be financed with loans.
Nicola stock is up nearly 170% since the special purpose acquisition company Vectoic announced plans to merge with Nicola. (Vectioc stock became Nicola stock.) Tesla shares are up 90% over the same period. Both returns are far superior to the Dow Jones Industrial Average and S&P 500 returns.
Batman and Superman eventually worked on their differences. Perhaps the Nikola-Tesla competition could benefit both shareholder bases.
Write Al Root at [email protected]