With climate change at the top of mind, electric vehicles are hotter than ever. And not long ago, Tesla (TSLA) was the only electric vehicle stock worth paying attention to, but now there are two more.
Nikola (NKLA), also named for the brilliant Serbian-American inventor Nikola Tesla, is valued at an amazing $25 billion.
Workhorse (WKHS), which is valued at “only” $1 billion today, is catching up fast as investors discover the company.
Nikola vs. Workhorse vs. Tesla
Who is Nikola (NKLA)?
Nikola, headquartered in Phoenix, Arizona, has no manufacturing plant and no prototypes of its vehicles, but it does have a good story—as Tesla did 10 years ago—so it’s possible that the company will be a big success.
Nikola’s key idea is using hydrogen fuel cells in semi trucks to generate electricity to power motors.
Semi trucks are the most logical first users of a hydrogen-fuel network, as they adhere to regular highway routes. And battery-hydrogen semis promise great torque and acceleration, regenerative braking, and greater efficiency than today’s diesel engines.
- Nikola Semi: The range of the Nikola semi would be 500-750 miles and the vehicle could be refueled in 10-15 minutes—assuming those hydrogen refueling stations get built. It’s a bit of a chicken-and-egg problem.
- Nikola Badger: The Nikola Badger is a pickup truck that would run on batteries—delivering 906 horsepower and a 0-60 mph time of 2.9 seconds. Such a package would deliver a range of 300 miles—not bad. But Badger owners would have the option of adding a hydrogen fuel cell to the system, which would add another 300 miles of range—and that’s impressive.
Today it’s difficult for drivers to find hydrogen outside of southern California, but if Nikola achieves its goal, users would eventually (perhaps by 2028) be able to access a “massive” network of 700 hydrogen refueling stations across the U.S.
(For comparison, Tesla, globally, has 1,870 Supercharger stations with 16,685 Superchargers—with more being added all the time.)
Right now, Nikola doesn’t even have a prototype (it’s looking for manufacturing partners), so success is far from assured. But the stock saw a huge wave of buying three weeks ago when the company announced it would begin taking pre-orders for the Badger pickup truck on June 29—and since then the stock has built a nice base centered on 70. Technically, that’s positive, though fundamentally, it’s hard to accept the idea that this company has a market capitalization roughly equivalent to Ford’s.
Who is Workhorse (WKHS?)
Workhorse is based in Cincinnati and is focused on developing sustainable and cost-effective electric vehicles for the last mile delivery sector.
Workhorse already has two vehicles in development, one with 650 sq. ft. of cargo volume and one with 1,000 sq. ft. Both have a range of 100 miles (enough for a day’s deliveries) and last week the company announced that both vehicles had completed Federal Motor Vehicle Safety Standards (FMVSS) testing. So this is definitely happening.
- Workhorse C650: Workhorse has licensed technology to Lordstown Motors (still private), which is also developing electric pickup trucks and other work vehicles. Thus, it’s very clear that in the years ahead, Amazon, UPS, FedEx and others will have a range of great zero-pollution vehicles to choose from.
Trouble is, all these companies (Nikola, Workhorse and Lordstown Motors) are going down the same well-paved road Detroit has used for years, outsourcing various segments of the vehicle as well as operations.
How Do Nikola and Workhorse Compare to Tesla (TSLA)?
Tesla got where it is by trying to control as many aspects of its vehicles as possible, and doing as much inhouse as possible—with the result that Tesla’s profit margins, if it ever stops its rapid pace of expansion, could dwarf those of its competitors.
And Tesla has trucks coming too!
- Tesla Semi: The Tesla Semi (all battery power, no hydrogen) was announced back in 2017 and it’s already real. Several have been in use by the company on the route between its Nevada and California factories for over a year. But it’s not in production yet.
- Tesla Cybertruck: The Tesla Cybertruck is also not in production yet, though management is aiming to start in late 2021, using a factory that will be built somewhere in the middle of the country. But Tesla does have 650,000 deposits from people who want to own one, and relish the idea of a driving a truck that looks futuristic.
I’m a big fan of competition, because I think it makes everyone involved work harder, so I’m thrilled to see increasing numbers of entrants in the race to develop and manufacture a battery-powered pickup truck.
And I’m a big fan of strong stocks, too. I’m keeping a close watch on NKLA and WKHS. As for TSLA, I continue to expect great progress on many fronts as the company leads the world’s transition to sustainable energy. Of the three, it’s still clearly the best electric vehicle stock to buy today.