Nikola (NASDAQ: NKLA) has been one of the most volatile stocks on the market so far this year. Quickly rising amidst the overwhelming excitement surrounding the EV world right now, Nikola’s rise to fame quickly met with a number of challenges. The company, which is working on developing electric buses, saw a crucial deal with General Motors (NYSE: GM) fall apart earlier this year. Before that, the company faced major accusations from short-sellers that further eroded its reputation. On December 23rd, Nikola ended up bearing the brunt of another piece of bad news as another major deal seems to have fallen apart.
Nikola was supposed to produce up to 5,000 zero-emission electric garbage trucks for Republic Services (NYSE: RSG), one of the largest garbage disposal companies in the country. Considering just how battered Nikola’s reputation and credibility have been, this deal was seen as one of the major anchors still keeping the company together. Unfortunately, Republic Services announced that the two companies would not be moving ahead with the deal after all.
In an official statement, Republic Services went on to say that it still plans to move ahead with electric vehicles in the future and will work with other manufacturers on electric trucks. It just seems that Nikola won’t be the one doing this work in the first place. Among other reasons, the Nikola added that it would need to build an entirely new electric truck design to meet Republic Service’s needs, something that wasn’t doable for the relatively small EV maker.
“After considerable collaboration and review, both companies determined that the combination of the various new technologies and design concepts would result in longer than expected development time, and unexpected costs,” read an official press release from Nikola. “As a result, the program is being terminated resulting in the cancellation of the previously announced vehicle order.”
Earlier this year, short-sellers from Hindenburg Research targeted Nikola, claiming that it had grossly overexaggerated the state of its technology in its marketing materials. While the company denied these claims, its founder, Trevor Milton, ended up stepping down from the company in the face of these accusations. Since then, shares have been steadily tumbling down.
Shares of Nikola ended up plunging around 10.7% on Wednesday in response to the news. Over the past few months, Nikola’s stock has collapsed by around 75%. The company, which first went public through a reverse merger back in June, has quickly ridden a wave of excitement as investors searched for the next Tesla (NASDAQ: TSLA).
Overall, most EV stocks have done quite well in 2020, barring certain exceptions like Nikola. Companies like Nio (NIO), a Chinese-based EV maker, have emerged as a regional contender with Tesla in the country. Other smaller businesses are also trying to make inroads into the lucrative Chinese market as well.
Overall, analysts sentiments surrounding electric vehicles as an industry is at an all-time high and is expected to be one of the fastest-growing industries in 2021.
Nikola Company Profile
Nikola Corp is a designer and manufacturer of battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen fueling station infrastructure. – Warrior Trading News
