Electric truck maker Nikola, new Tesla or big sham?

With its electric and hydrogen trucks, Nikola claims to want to revolutionize the transport sector. An investor maintains that the group is based on wind. Result: the stock market title has been a roller coaster for a week.

Founded in 2015 by Trevor Milton, the company works mainly on the development of trucks and pick-ups running on electric batteries or hydrogen fuel cells, as well as on hydrogen charging stations.

It has yet to manufacture anything but has forged strategic partnerships with several reputable industrial groups, including the German engineering giant Bosch, the Italian CNH Industrial and, most recently, the American automaker General Motors.

The announcement of an agreement with the latter on September 8 had jumped the title by 41% on the New York Stock Exchange, where the group arrived in June via the merger with a company founded by a former senior GM official. , VectoIQ.

Like Tesla, Nikola is benefiting on Wall Street from an investor craze for the electric vehicle sector, seen as the future of the automobile.

But the investment firm Hindenburg Research published a report on September 10 accusing the start-up of being a “complex fraud” based on the multiple lies of its founder and of having “misled its partners (… ) by falsely claiming to have important technologies “.

She therefore bet on the fall in the stock market, which collapsed by 36% in three days.

Nikola immediately refuted the accusations before issuing a more substantial denial on Monday, and picking up 11% on Wall Street in the process.

The start-up seized the American financial markets authority (SEC) to discuss this report intended, according to it, to manipulate the price of its share.

But the latter relapsed by 8% Tuesday when, according to the Wall Street Journal, the SEC and the Department of Justice have opened investigations, but on Nikola.

– Staging –

Nikola does not completely deny one of the investment company’s most spectacular attacks, namely the staging of a video in 2017 showing one of its prototypes in action.

According to Hinderburg, the truck was “towed up a hill on a lonely road and just filmed going down the hill.” Nikola just retorts “never having said that the truck was running on its own propulsion system in the video” but simply indicated that the vehicle was “in motion”.

For Hindenburg, Nikola’s denial on this point, as on others, is “completely inadequate”.

The financial director of the start-up, Kim Brady, for his part considered Monday that the report was “offensive” to their partners. Before engaging with Nikola, “Bosch has seconded a number of engineers to study the file for several months,” he said, for example, at a conference organized by the RBC bank.

And GM was supported by the biggest banks and consulting firms before agreeing to take an 11% stake in the company, he added.

For Daniel Ives, analyst at Wedbush, Nikola’s future depends on how the group deploys its strategy by 2023.

“If Trevor and his team are able to build their plant in Arizona, turn prototypes into models (both the Badger pickup and the trucks), lay the foundations for their (hydrogen) charging network, and attract truck orders by offering an attractive gross margin, then Nikola has a real opportunity and the action will reflect this dynamic, “he said in a note.

Can the group become the next Tesla, the electric vehicle maker founded by the whimsical Elon Musk who is now worth much more on the stock market than traditional manufacturers while selling far fewer cars?

Probably not, answers Dan Ives. As Apple or Amazon dominates by far their respective sector, “there is only one Tesla,” he says to AFP. “But in the electric vehicle market, hundreds of billions of dollars will be spent in the next decade. There will be several winners,” explains the specialist, estimating that Nikola could be part of it.

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