Nikola’s fuel-cell powered long-haul trucks will be ready for sale in 2023.
Courtesy NikolaAlternative-fuel trucking company Nikola released another response on Monday to a negative report from short seller Hindenburg Research.
Hindenburg released a report on Thursday alleging, among other things, that Nikola (NKLA) founder Trevor Milton hasn’t been truthful about Nikola’s fuel-cell and battery technology.
Nikola management called the report salacious in a Friday news release. Monday’s release offers investors more detail, saying Nikola has been through “extensive due diligence processes” with companies it is doing business with, including auto-parts maker Bosch, hedge-fund ValueAct Capital, machinery-maker CNH Industrial (CNHI) and General Motors (GM).
In addition, the company reiterated its timeline for introducing its commercial-vehicle product—a battery-powered truck manufactured by a division of CNH called the Tre—in 2021. Nikola’s fuel-cell powered long-haul trucks will be ready for sale in 2023.
Monday’s news release directly addressed some of the points made in the Hindenburg report. For instance, it said Hindenburg mischaracterized quotes from a Bosch employee. “Bosch stated specific instances in the [Hindenburg] report quoting a Bosch employee were taken out of context,” according to the release. “Nikola and Bosch are aligned on the product roadmap for the Tre truck. The five trucks are currently being built and commissioned in Ulm, Germany, and are preproduction builds. Hindenburg either recklessly misunderstands or willfully misrepresents the vehicle preproduction process to fit its narrative,” Nikola said.
Nikola also disputed Hindenburg’s allegation that it wasn’t being truthful about making its own inverters. “Nikola has been designing, engineering and working on its own inverters for quite some time. The company does use third-party parts in prototype vehicles, some of which may be subsequently swapped out for its own parts in production.” Inverters, essentially, take direct current electricity from batteries, or fuel cells, and make it alternative current for electric motors.
The release does appear to indicate that some of the issues in the Hindenburg report may be valid, such as a Nikola truck rolling down a hill, not under it’s own power. Hindenburg was referencing an old marketing video and the new Nikola release states the truck in the video “was never described as under its own propulsion or powertrain driven.”
Overall, there are 11 separate bullet points in the news release directly addressing claims in the Hindenburg report. Points made range from hydrogen production technology to company marketing. The release, in its entirety, can be found here.
Hindenburg responded on Monday: “We find the company’s statement this morning to be completely inadequate. Nikola had previously promised a point by point rebuttal to our report and this morning’s press release did not deliver on that promise.
“In the few areas where the company did respond, it largely confirmed our findings or simply raised new unanswered questions. We will be issuing a detailed response.
“We remain short.” Hindenburg had said last week that it had borrowed and sold Nikola stock—going short—actively betting on price declines.
Nikola shares dropped more than 24% over Thursday and Friday, following the release of the report. Shares of the special purpose acquisition company, or SPAC, which now trade as NKLA are up almost 180% since announcing plans to merge in early March. The S&P 500 and Dow Jones Industrial Average, for comparison, are up 11% and 7% over the same span.
Nikola stock was down 3.3% Monday morning. Investors, it appears, don’t like the uncertainty created by the report.
Wedbush analyst Dan Ives wrote in a Monday note that the Hindenburg report references “a host of historical negative issues,” adding that from this point forward Nikola’s success will be about business execution. He rates shares the equivalent of Hold and has a $45 price target for the stock.
Write to Al Root at allen.root@dowjones.com
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