The CEO spent a lot of time answering the question about the Badger. He says that he was impressed by having 89,000 clicks for interest, but I don’t think so. He was clear that they were never interested in making a pickup and — given what he didn’t say — they just want to dump Trevor’s CAD files on someone else and let them worry about making it.
I must say that, after listening to the call, I have dialed back my expectations of fraud. Sure, there are red flags all over and Trevor gives every indication of being a con, but the reality seems to be that they have ignored first principals and just want to believe. For example, to them getting the 3.5 cents per kWh is just a matter of wheeling and dealing. There is no concern for what the bottom line price of generation is. They don’t know and don’t care: that’s the problem of whoever they partner with.
But what got my attention the most was the line at the beginning of the call about Nikola Motors being vertically integrated. I mean, they constantly talk about having partners do, well, everything. All I can figure is that by “vertically integrated” the mean that they are a middleman, an aggregator that sells a complete package to the customer. But that isn’t what being vertically integrated means.
In fact, they play so loose with the facts of their joint ventures that it still isn’t clear if the factory they just broke ground on will really be theirs, or if it is another company that they have partnered with. They certainly give the impression that it will really be their own, but on reflection it just isn’t clear.
Bottomline, I don’t see Nikola Motors going away anytime soon. Their roadmap looks achievable, at least at the high level they presented. Production levels for the next year or so are at hand built rates. They don’t even plan on production of the fuel cell Tre until 2023. They will have very modest needs for batteries simply because they will only be making a few prototypes.
The biggest near term concern I had was their ability to pay for much of anything past 2020, but I don’t have a head for numbers like I used to and just hearing some tossed around on the call I’m not certain I was keeping things straight. But if my impression was correct they are going to need a cash infusion in 2021. I’m familiar with arguments about capital raises not devaluing the stock, but when the warrants came into play $NKLA dropped like a rock. While I wouldn’t want to short $NKLA, I sure wouldn’t want to be holding the stock either.
