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Zero-emissions transportation solutions company Nikola Corporation recently parted ways with its founder Trevor Milton, who also served as the company’s Executive Chairman previously. Even though Milton’s exit came at a time when the company was under fire thanks to numerous allegations of fraud, the future still looks bright. Since Milton parted ways with the company, it has experienced a surge in its share prices, going up by almost 15%.

As a result, both market analysts and investors are hopeful that in the days ahead, the company will make for a profitable investment. In this post, we’ll touch on a few things you need to know before you decide to invest in Nikola Corporation.

1. Diesel-disrupting potential

So far, the diesel industry has remained virtually unchallenged, as there are very few alternatives that can compete with it. However, Nikola Corporation, with its low maintenance costs and competitive fuel weight and range, has the potential to put a dent in the diesel industry.

2. Badger electric pickup truck

Before his exit, Milton was optimistic about the company’s Badger electric pickup truck, for which the company started taking pre-orders since late June. The truck is available in two variants; one combines fuel cell technology with electric batteries, while the other uses just electric batteries. Pre-order customers will also receive priority tickets to December’s Nikola World event.

3. The next Tesla?

Nikola investors believe that the company is in the running to become the next Tesla. The five-year-old company is valued at more than what Tesla’s valuation was when it was of the same age.

Potential pitfalls

Even though Nikola Corporation offers several reasons for existing and potential investors to be optimistic about, there are certain pitfalls that investors need to prepare for as well. For starters, the fact that the company has lost more than $188 million since its inception means that it has to wait until at least 2023 to hit the $1 billion revenue mark. Experts suggest that potential production delays may also affect investors adversely.

The company’s ambition of its Badger truck successfully competing with diesel trucks is also under scrutiny. It has to make efforts to prove to fleet owners why switching from diesel to hydrogen fuel cells makes sense from a financial standpoint. According to the quarterly earnings report published by the company in August, the company made $0.04 million in revenue, slightly higher than what analysts predicted.

For now, investors should wait until the company publishes its next quarterly earnings report in November.

Investment Disclaimers


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