Nikola's Set to Make a Comeback in 2022

Nikola's Set to Make a Comeback in 2022

2021 ended with Nikola Corporation NKLA achieving a critical milestone by delivering its first-ever commercial electric vehicle, the BEV semi-tractor, which is part of a test batch as it prepares to deliver 14 test vehicles to two clients over the next several months. If the zero-emissions semis deliver Nikola's promise, 190 more trucks will be ordered over the following year.

Test Delivery of Trucks is Finally Happening

Nikola pulled it off right before Christmas or more precisely, on December 22nd, when it delivered its first BEC truck to California-based Total Transportation Services, which is the first of four trucks the company is planning to buy and test. If the trials are successful, the company has issued a letter of intent to buy 100 more, or more precisely 30 this year and the remaining 70 during the following year.

Nikola also received an initial order for 10 test trucks from Heniff Transportation Services, which will be followed by 90 more if the company passes the testing requirement.

Putting the SEC Investigation Behind

The SEC accused the company of violating US securities law with numerous misleading statements made in 2020 about the company's products and its future financial prospects. Its founder and former CEO, Trevor Milton, was arrested last year and charged for falsely portraying the company.

On December 21st, Nikola agreed to pay the SEC $125 million as a civil penalty over five $25 million installments over the next two years. In exchange for settling, Nikola is freed from the case, noting in a press release that the settlement "resolves and concludes all government investigations of Nikola", with the company neither admitting nor denying the SEC's findings in this matter. Unlike his company, Milton filed several motions requesting the judge throw out his case, arguing that he wasn't given fair notice that his statements could be considered criminal or would in any way influence the stock.

Since Nikola has already set aside $125 million from its third quarter to cover the penalty payments, the matter should have no further effect on the company's financial position and performance. However, the company could cancel out the incident almost entirely as it is pursuing legal action to seek reimbursement from Milton himself.

First Mover Advantage is Not Entirely Lost

The fact that Nikola got an actual EV to be tested on the road, as opposed to merely working on prototypes, gives it at least a chance to position itself in the emerging electric and hydrogen-powered truck market. But, Tesla TSLA is likely to remain the leader for the foreseeable future, with legacy automakers such as Ford Motor F bringing out their iconic models in an electric version such as the Lightning F-150 pickup.

There are also newcomers such as Atlis Motor Vehicles and Hercules Electric Vehicles that are due to deliver tech advanced and luxurious version of the electric pick up this year, both of which will be equipped with Worksport Ltd's WKSP revolutionary solar technology Terra Vis.

Light at the End of the Tunnel?

After struggling with a series of difficulties for many months and losing the support of General Motors GM as a consequence, it seems the electric semi-truck maker is getting out of the woods. When it was founded in 2015, Nikola had a unique position in the buzzy EV space by claiming it would make zero-emission big rigs using hydrogen fuel cell technology, but only time will show if it can bounce back and restore the confidence of investors in what is a very fast and competitive new market.

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