Many people still haven’t realized Nikola is built on a mountain of bullshit, but as more dominos start to fall the market is slowly catching on. Remember that huge garbage truck deal Nikola hyped up, in which Republic Services agreed to buy 2,500 – 5,000 electric Nikola garbage trucks based on the Nikola Tre? Yeah, well Republic Services just canceled their order and now Nikola isn’t going to make garbage trucks anymore. Who could have seen that one coming?
Nikola is a public company that has never shipped a real product. Most of their “products” seem to be images made in Photoshop, often presented deceptively to make it appear that the products are fully functioning. When Nikola announced the Republic Services garbage truck order, it was the first time they had ever mentioned making a garbage truck at all. They had no prototypes to present –– just the photoshopped image you see above. Despite this, Nikola stock still shot up 22% on news of the fake order for an imaginary product. For the most part, the financial media blindly accepted the premise that Nikola would take their electric Tre platform (which also hasn’t shipped) and make “a few small changes” to turn it into a garbage truck.
Since that triumphant announcement, shit has really hit the fan at Nikola. Trevor Milton was forced to resign after the Hindeburg report and allegations of sexual assault, Nikola stock has tanked, and GM broke off a partnership where they really had nothing to lose. All that noise must have raised alarm bells at Republic Services, forcing them to look closer at the deal. Now that they have, they don’t want to be associated with Nikola either.
Nikola Motor, a would-be Tesla rival that has faced a string of humiliating disasters since entering public markets just over six months ago, announced another one this morning. Republic Services, a large waste management company, has canceled an order for 2,500 zero-emissions garbage trucks—a deal that Nikola at the time described as a “landmark.”Fortune
A “would be” Tesla rival? What does that mean? Maybe that they “would be” one of Tesla’s rivals in an alternate universe? Come on now people. Let’s leave the “Nikola is like Tesla because they were named after the same guy” nonsense in 2020. Nikola picked their name ten years after Tesla started specifically to elicit that comparison without earning it. It’s a stunningly obvious deception, but what’s most amazing is how many journalists took the bait and how often people continue to fall for it.
The “string of humiliating disasters” is accurate though.
The announcement triggered the latest in a long series of bloody reckonings for Nikola investors. The stock had already slid from a peak of nearly $80 per share just after its Nasdaq debut in June to close at $16.83 on Dec. 22. The bad news sent it down another 9% by midmorning to just over $15 per share. Dan Ives, a Wedbush technology stock analyst, described the announcement as “another step backwards” for Nikola.Fortune
Oooof. Anyone who is still a Nikola investor at this point needs to get their head checked.
The Republic deal was first announced in August. Republic committed to an order of 2,500 refuse trucks based on the Nikola Tre truck platform, which will use either batteries or, in a version slated for 2023, a liquid hydrogen fuel cell. Nikola’s then-CEO, Trevor Milton, described the Republic deal at the time as a “game changer.”Fortune
He wasn’t wrong –– the deal changed the game of securities fraud forever.
Now, though, Nikola says, “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. As a result, the program is being terminated, resulting in the cancellation of the previously announced vehicle order.”Fortune
“We both agreed to break up it was mutual”. Right. Let’s be real Nikola, you just got dumped because Republic Services found out you were cat-fishing them.
“The combination of various new technologies and design concepts”. What happened to just making a few changes to the Nikola Tre? Wasn’t it obvious to everyone as soon as the order was announced that Nikola had absolutely no ability to deliver this product in any reasonable timeframe? Apparently, they couldn’t make it work financially either which suggests they’re burning cash too fast and management is getting nervous. Nikola will undoubtedly be returning to capital markets with their hat in their hand very soon to dilute their investors further. If the stock keeps moving in this direction, the terms of the deal will not be pretty –– assuming investors are willing to make a deal at all.
Here’s the most amazing part: It’s not just that this one big garbage truck order is being canceled. This project was such a disaster that they’re canceling the whole garbage truck. The whole project is getting shut down. Clearly, the “Nikola Refuse” only existed in the context of this order. There was no real product –– Nikola just promised whatever was needed for Republic Services to sign on the dotted line, because they needed an announcement to boost the stock. Nikola is trying to spin this dumpster fire by saying the order was canceled because the program was being terminated. The reality, of course, is that the program is being terminated because the product’s sole customer canceled their order.
It doesn’t take much reading between those lines to infer that Nikola may have overpromised what it was capable of. That would align with the company’s track record.Fortune
In the months since the Republic deal was announced, a long series of overstatements and alleged deceptions by Nikola and its cofounder Trevor Milton came home to roost. That began in September when a short-seller’s report claimed a number of deceptions by the company, some of which Nikola later acknowledged. Milton resigned as CEO, and the SEC has launched an inquiry into Nikola, including grand jury subpoenas. In November, a vital deal with GM was largely withdrawn. Nikola’s stock slid steadily during all of this.Fortune
Someone also pointed out this gem of a comment from Heavy D, one of TV’s “Diesel Brothers” that was paid to promote Nikola and their stock:
I for one can’t wait to hear what Heavy D has to say.