Electric Truck Wars Heat Up

New offerings from Tesla, Ford and Nikola give a glimpse of the future

  • Electric trucks in the pipeline are sending shares higher
  • Tesla rival Nikola is building electric trucks with hydrogen fuel cells
  • A lot of hype and promotion, but the market may not be large enough
  • Nikola has to build a large hydrogen generation and fueling network

Trucks are as American as Apple Pie or baseball. Ford launched the first factory-built pickup truck for farmers in 1925, and the company's F-Series has been America's best-selling vehicle for 38 straight years. We're hearing a lot about trucks lately, but these aren't your father's or grandfather's pickups. We're not even 100% certain they'll be yours. For one thing, most only exist as prototypes, digital images and specs at this point and not all may make it to market. Ford yesterday delayed its F-150 electric pickup truck launch to mid-2022.

Yesterday Tesla's stock price tore past $1,000 after CEO Elon Musk told employees that it's time to "go all out" and bring the Tesla semi, unveiled in 2017, to volume production. "It’s been in limited production so far, which has allowed us to improve many aspects of the design," he said. In April, production was delayed to next year. We're not sure what caused the change of heart, but we can speculate a new player that shares the name of the Serbian-American inventor had something to do with it. Bloomberg estimates that Tesla stock is 11% away from making it the most valuable car company in the world, taking the title away from Toyota. Production on the the Cybertruck, Tesla's entry in the pickup race, is set to start late next year.

truck chart

Nikola is a wannabe Tesla with a soaring market cap since it went public earlier this month. It was valued at $3.3 billion before its debut, but is now worth around the same as Ford and Fiat Chrysler even though it hasn't sold a single vehicle. Nikola is building hydrogen fuel cell (Musk calls them "fool cells") electric semis and a Badger pickup its founder described as "bad ass." It claims it has $10 billion worth of "orders," but there's been no deposit money.

In the last month, the stock is the most popular on Robinhood's trading platform and is currently held in some form by 130,000 users. Famed short seller Andrew Left believes the stock price will be back to $40 in a month. "When $TSLA had this mkt cap the Model S was scaled and X was produced. There is no real IP at $NKLA and PR's have been overly promo," he tweeted.

Others with upcoming electric trucks include startups and established firms, like Ford and Amazon-backed Rivian, Bollinger, Atlis, Lordstown Motors, General Motors and Ford. It's getting mighty crowded and the concern is there won't be enough buyers. Sam Fiorani, AutoForecast Solutions analyst, said electric pickup sales may not exceed 70,000 a year. This estimation could be pessimistic, but it will be tricky for carmakers to make the vehicles profitable and affordable, considering the price of the massive batteries. Tesla claims it has received 250,000 orders for the Cybertruck, but these deposits are refundable and cost just $100.

Companies may also need to invest in charging networks like Tesla did. This is especially a problem for Nikola. Hydrogen fuel cells are lighter, charge quickly and provide longer range, but you can't plugin and refuel at home and the charging network for trucks doesn't exist yet. Nikola is planning to build its own with 700 stations and include the cost in the lease.

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