Nikola Motors: A Great Business Plan

Despite having $0 in revenue, Nikola Motors does have a bright future

It sounds absurd that a company that has $0 in revenue would have a market cap of $10 billion. Well, that’s the current reality in the present day as that is what Nikola Motors, a trucking startup with $0 in revenue, is trading at.

Before you dismiss Nikola Motors, it’s worth your time to learn more about Nikola Motors and understand why many investors are invested in the company.

First, the business model for Nikola Motors is lean, making the business less capital intensive than other trucking startups. While Nikola Motors focuses on the fuel cell design, the company has partners focusing on the powertrain, the assembly of the truck, and other aspects of the trucks. As long as Nikola Motors’s business partners hold their end of the deal, Nikola Motors will have smoother execution. The product quality will be high as Nikola Motors will have less pressure with perfecting other aspects of the trucks.

Also, the adoptions for hydrogen will be a lot easier than many think. With hydrogen prices being high (estimate $20/kg), according to Nikola founder Trevor Milton, the Nikola Motors team has been able to reduce the cost of hydrogen to less than $3/kg. To give you perspective, the price of diesel is $4/kg. By standardizing the designs of their refueling facilities, they’ve been able to lower costs immensely. With hydrogen being cheaper than diesel, truckers would be more inclined to switch to hydrogen.

Despite having a lean startup, it looks like Nikola Motors is involved with the development and possibly the management of the hydrogen refueling stations. According to Trevor Milton, Nikola Motors plans on selling the hydrogen refueling stations along with the routes. This will not only bring in profits for the company but also allow the company to focus on what they specialize in: fuel cell batteries.

Altogether, Nikola Motors looks to have a great business plan. With $0 in revenue, many would call the company a business plan. The lean business model Nikola Motors has makes it easier for the company to launch its products and handle a surge of demand. Regarding the cost of hydrogen, it’s amazing to see that they’ve been able to make the cost of hydrogen to be cheaper than the cost of diesel. While it would be great to see Nikola Motors generating recurring revenue from running the hydrogen refueling stations, selling the station along with the routes gives the company more capital to work on better products and services.