RIDE ALREADY HAS AH FACTORY, Jason Hall: You could call it the one everybody thinks is a fraud. I think you could call it that, and that would be a pretty accurate description. I've followed Nikola for a long time. I followed the company since it was first founded, well before it went public. It's been really interesting to me. I think it's a misunderstood opportunity because this isn't a company that's making cars. This isn't a company that's focused on personal automobiles. Actually, a little bit before it went public with its founder, former chairman, who is no longer associated with the company, the Badger pickup became the thing. This is the thing that the company is going to do, and it created massive interest, drove the stock price up. At one point it was more valuable than Ford (NYSE: F) and a lot of the other automakers, even though it didn't even have a real clear date to reach commercial manufacturing. Since then, their founder is gone. He's no longer involved in the management of the company or on the board. His association is far less. The Badger pickup truck has been shelved. All of those things, I think, frankly put the company in a better position, and it's one that's easier to sleep on. As much as there is the idea that the company never really had any valuable intellectual property, there was a differentiator. If you think about hydrogen, because the idea here, the thesis for the company was its going to develop hydrogen-powered and electric powered heavy-duty trucks. Here's where that its so valuable. The bottom line is that today, electric powertrains, battery electric powertrains can't pull a heavy-duty truck with 80,000 pounds of total weights 400 or 500 miles. The technology doesn't exist without taking up a massive amount of the weight and the carrying capacity with extra batteries, and then you stop to refuel or recharge, and you're talking hours to recharge versus a few minutes to refill a diesel tanks. The bottom line is that electric doesn't get there for a lot of the applications for heavy trucking today. It just doesn't exist. That's why hydrogen is really interesting in this space. The company is focused on that, and I think they have a lot less distractions today, and I think that puts them in an interesting situation that even if they don't have specialized intellectual property, the technology is getting better, the hydrogen costs are falling, it's one that I wouldn't sleep on. Another thing too, this is about a $5 billion company, and it could be zero, because they don't have a business yet. But really, it's not competing with General Motors (NYSE: GM). It's not competing with Ford and Tesla (NASDAQ: TSLA). It's competing with companies like PACCAR (NASDAQ:PCAR). That's about a $30 billion company that owns Peterbilt and Kenworth. It's competing with Navistar (NYSE:NAV). It's competing with Volvo trucks, so that owns Mack trucks and the Volvo (OTC: VOLVY) trucks. That's where this company is going. It's more about the dollars and cents and meeting the application needs. That's why I think it's an easy one to sleep on.
Anand Chokkavelu: At five billion, believe it or not, it's on the lower end of valuations in the space, if it does fulfill its promise.
Jason Hall: They got to build a factory, and they got to start building trucks first. That's the hard part. The easy part is apparently getting a multi-billion dollar valuation. Next up is SolarEdge, SEDG, $15 billion market cap, about a billion and half dollar in sales. Anand has dubbed Jason's solar baby. I love that. I'm sure everybody is wondering, what the heck is a company that makes module level panel electronics for solar panels doing in this conversation about EVs, and that's just the simple thing that SolarEdge is working to do, and they are operationalizing their business and they're diversifying. A couple of years ago, they bought a company that makes electric vehicle powertrain components, so they've gotten into the supplier side of the EV business. They already make EV charging systems. They're really already tied into that renewable energy ecosystem and being a supplier for the electric vehicles industry. Supplying those powertrains is a really good opportunity because if you look at what's happening, think about those numbers. There is hundreds of companies out there that are trying to make electric vehicles. You know what they need? Powertrain components. This is an industry that relies on suppliers. If you can be a key supplier, you could do really well. This is an easy one to sleep on, SolarEdge.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
Anand Chokkavelu, CFA has no position in any of the stocks mentioned. Jason Hall owns shares of Ford, Nikola Corporation, and SolarEdge Technologies. Matthew Frankel, CFP owns shares of General Motors. The Motley Fool owns shares of and recommends Paccar and Tesla. The Motley Fool recommends SolarEdge Technologies. The Motley Fool has a disclosure policy.
The Motley Fool Makes 5G Buy Alert
