Why Upstart Nikola Is Trolling Tesla

The EV truck startup has a $23 billion valuation — staggering for a company that generates virtually no revenue and has yet to sell anything

Nikola Motor is taking pre-orders on its consumer-facing Nikola Badger pickup truck June 29, 2020, which will retail for an estimated $60,000. Nikola hopes it will be a direct competitor to Ford’s F-150 in 2022. Photo: Nikola Motor

Every successful company produces imitators, but truly great companies are hard to copy. So the only question with a close imitator is who are they trying to fool: themselves or their investors?

In the ’80s and ’90s, there were reams of books published about how companies could be more like GE. In the late ’90s, traditional retailers tried to glom onto the internet boom: K-tel, which sold music through infomercials, spiked from $3 a share to $34 after launching a website. Books-a-Million did even better, rising from $3 to $50.

Today, the world’s most famous, if not eccentric, CEO is Elon Musk, whose electric car company, Tesla, is the second most valuable automaker in the world. Inevitably, there’s an imitator — Nikola Motor, the Phoenix-based EV truck startup that recently went public on June 4. In many ways, Nikola is a fledgling company: it’s been in business since 2014, has announced several trucks and automobile products but not sold any yet, and generated $58,000 in revenue last quarter from installing solar panels, a business it expects to discontinue — a fact that should strike Tesla followers as particularly amusing given Elon Musk’s own pivot into electric vehicles by way of SolarCity.

Nikola is a darker story, about a CEO who uses the same tools, and abuses investors’ tendency to pattern-match, in order to build a business whose primary function is selling stock.

But Nikola is a big company in two senses: Its CEO, Trevor Milton, makes bold proclamations and promises (sound familiar?), and the firm sports a $23 billion market value, just 7% less than Ford’s, a staggering valuation for a company that generates virtually no revenue and has yet to sell anything. And while Milton is betting big that the company’s hydrogen-electric semi trailers will drive its core business (pre-orders represent nearly $10 billion in potential revenue), the founder has unabashedly come out saying he hopes that his…