Batman versus Superman. Yankees versus Red Sox. Nikola Tesla versus Thomas Edison. These are some of the greatest rivalries of all time.
Tesla (ticker: TSLA) is now the world’s most valuable car company, disrupting the entire automotive industry with its battery-powered cars. Nikola (NKLA), 10 years after Tesla’s start as a publicly traded company, has similar aspirations—to be the most valuable trucking firm on the road.
Tesla, of course, is best known for luxury automobiles such as the Model S, which can retail for more than $100,000. Nikola, for its part, is planning to make big rigs—heavy-duty trucks that share interstate highways with cars. But Tesla has a battery-powered electric semi-truck planned for 2021 which will compete with Nikola offerings. What’s more, both Nikola and Tesla are pure-play electric vehicle makers with no legacy of gasoline- or diesel-powered transport.
Tesla is an older company, producing billions in sales as well as bottom-line profits. Nikola doesn’t plan to generate cash flow for a few more years. But Nikola has the upper hand on Tesla in one respect: stock market valuation. Its shares are more valuable at this point in Nikola’s history than Tesla’s were.
Nikola came out of the gate valued at about $12 billion. Tesla was valued at roughly $2 billion after its 2010 initial public offering.
During its IPO, Tesla raised about $225 million selling stock at $17. Since then, Tesla has raised, roughly, $15 billion net of debt repayments, over the past decade to build its electric-vehicle business.
Sales over that span have gone from about $100 million to an expected $30 billion in 2020. Tesla’s market value has soared from roughly $2 billion to $280 billion.
It took Tesla about 5 years after its IPO date to sell 100,000 vehicles cumulatively. It took about 9 years for Tesla to generate positive free cash flow.
Batteries powering electric vehicles, at this point, are heavier than a Nikola hydrogen fuel cell, including fuel weight, or a diesel engine and its fuel. The weight penalty limits long-haul shipping opportunities. Weight…