ust when investors thought things couldn’t get worse for would-be Tesla rival Nikola Motor Company (NASDAQ:NKLA), the cancellation of another big deal has added to the pile-up of bad news that has so far stripped over 80% from its share price since its peak on June 9th.
Nikola, the EV truck and hydrogen cell maker that stunned everyone earlier this year, has seen another game-changing deal cancelled, this time with Republic Services, sending share prices down 10% Wednesday, with no reversal clear in after-hours or pre-market trading Thursday.
Nikola cut a deal in August to mass-produce 2,500-5,000 electric trucks for Republic Services, which is seeking a more sustainable fleet of trucks to meet emissions standards. The trucks were to be produced in 2023, with road testing to take place in 2024.
Nikola maintains that the contract was canceled mutually; however, speculation, of course, remains that Republic Services may have withdrawn due to Nikola’s troubles with the SEC.
“This was the right decision for both companies given the resources and investments required,” Nikola CEO Mark Russell said in a released statement. “We support and respect Republic Services’ commitment to achieving environmentally responsible, sustainable solutions for their customers. Nikola remains laser-focused on delivering on our battery-electric and fuel-cell electric commercial truck programs, and the energy infrastructure to support them.”
Further, Russell noted that the contract would require Nikola to design a completely new truck from scratch.
And Republic, for its part, has said it remained committed to an EV future for its massive fleet and planned to work with other manufacturers.
In September, Nikola founder Trevor Milton suddenly resigned and was replaced by auto-industry executive Steve Girsky after short-seller accusations that Nikola lacked the ability to actually deliver on its promises to shareholders.
Then, in November, GM withdrew from a major investment deal with Nikola, further damaging the company’s credibility with investors.
Indeed, the press section on Nikola’s website stopped adding new news stories after September 30th, when all the news turned sour.
On Wednesday, Wedbush analysts gave Nikola an “underperform” rating as a result of the latest deal bust, calling it a “gut punch” to investors.
“The company still has a Kilimanjaro like uphill climb to gain back Street credibility heading into 2021 with today’s news viewed as another step backwards,” the analysts said.
