A new note from RBC Capital Markets explains why electric and hydrogen truck startup Nikola may be poised to succeed despite now-departed founder Trevor Milton's allegedly false claims about its progress and tech.
Details: Instead, "What made NKLA unique was [the opportunity] to sell 'routes' via fuel cell truck leases, and helping industry solve 'chicken and egg' problem associated with hydrogen infrastructure build-out."
- "If they're able to succeed, this could potentially create a first mover advantage and a feedback loop allowing them to sell more trucks."
Yes, but: RBC analysts say Nikola must "rebuild credibility" and the stock will remain in the "penalty box" while that happens.
- Also, they note risks facing Nikola, some of which are the same ones facing any alternative transportation startup, such as price volatility for raw materials, slow market uptake of non-fossil fuel tech, and more.
Where it stands: Nikola's big industrial partners are sticking with the embattled company, providing another sign it's positioned to survive the tumult for now.
- German industrial conglomerate Bosch, which is providing components for a planned hydrogen semitruck, is still on board, per Reuters.
- And Nikola's top finance exec said at an investor event yesterday that Bosch and CNH Industrial — the European company slated to manufacture the Nikola Tre — remain partners.
- As we reported, GM still plans to build Nikola's Badger pickup and supply tech for its heavy trucks, and fleet owners that placed semi orders haven't bailed.
