Tesla Stock vs Nikola Motors Stock (TSLA vs NKLA)

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So in this video today we are going to be talking about nikola motor stock versus tesla so personally i have invested in nikola motors i don’t have any investments within tesla but a lot of people are very confused about these two companies they don’t understand what the differences are or even if there are any similarities whatsoever so there are definitely some

Similarities between nikola and tesla but there’s also some huge differences between these two companies and the business models they are operating so what we’re going to cover in this video are the key differences between these two companies now back on may 11th i did a video talking about this vecto iq reverse merger with nikola motors and as mentioned in that

Video i decided to buy some shares of that holding company before the reverse merger took place so i ended up buying 51 shares of vt iq at a cost basis of eighteen dollars and 96 cents per share and at the time during that video that stock closed at 20 dollars and 38 cents per share well now that that reverse merger has taken place that stock went soaring and it is

Now double or triple that price so not trying to toot my own horn here but i am gonna you know pat myself on the back a little bit as i was somebody who was pretty early on that trend with that vecto iq acquisition and there’s actually another reverse merger going on right now with a company called sh ll and i might do a dedicated video on that if you guys want

To see me do that just go ahead and drop a like on this video if i get enough interest i will do a dedicated video on sha ll as i purchased shares of this company as well now i have no immediate plans to sell my 51 shares of nikola motors in my opinion right now that price is totally irrational and illogical however i like the company as a long-term investment so

I’m gonna hold on to them unless something drastic happens if the price doubled again or something i might consider selling but for the time being i’m gonna hold on to my shares and lastly guys before we get into the compare in here i just have to make this disclaimer that this is not financial advice you always need to do your own due diligence before investing

In the stock market or picking stocks and i also own shares of nicola motors that being said guys let’s get into the comparison alright guys so the very first thing i want to look at between tesla and nikola motors is what does the general public think these companies are worth and the best way to determine that is looking at the market capitalization so first

Of all tesla being a larger more well-established company let’s start by looking at tesla so tesla stock has done exceptionally well over the last year here and if we take a look at the current share price it is worth just under $1000 per share that gives tesla a market capitalization of around 180 billion dollars so based on the money invested by shareholders the

Company has a value of about 180 billion dollars which makes this one of the most valuable auto manufacturers out there despite the fact that they don’t have large market share yet on the other hand we have nikola motors which as you guys can see from that stock chart has had a meteoric rise here based on the reverse merger that took place with vecto iq so based

On the current share price which is around 73 dollars per share the market has given nikola motors a value of around 26 billion dollars that means that tesla is worth about seven times that of nikola motors so one of the very first things we have to understand here when comparing these two stocks is that tesla has a much larger market cap or market valuation but

There’s a good reason for that and this is based on the company revenue now real quick guys before we get into the revenue of these companies this right here is the weeble investing platform it’s completely commission free and if you want to check it out there’s a link down below if you sign up you’re going to get two stocks completely free just for opening up a

Brokerage account and funding it with $100 so be sure to check that out at the end of this video now we’re gonna jump over to yahoo finance because i want to look at the revenue numbers for tesla and then we’ll talk about the situation that we have with nikola motors so if we take a look at the income statement here from tesla we can see that this company is in fact

Generating revenue and they’re also growing revenue year after year back in 2017 it was around 11 billion 2018 substantial growth there to 21 billion and in fiscal year 2019 they finished out just shy of 25 billion dollars in revenue now revenue is not the end-all be-all and if we take a look at the net income here we can see this company is still not profitable

In 2017 they lost about 1.9 billion 2018 they lost nine hundred seventy six million 2019 they lost 862 million but over the 12 trailing months they have lost a much smaller amount of money but if we take a look at this here on a quarterly basis we can see that they are actually profitable or they have been over the last couple of quarters in quarter three of 2019

That was a net income of 143 million in quarter four of 2019 it was a net income of 105 million quarter 1 of 2020 it is net income here of 16 million so they are very slightly profitable so the situation here with tesla is that revenue is growing year after year it was around 25 billion last year and they are a profitable company by a very slim margin now on the

Other hand we have nikola motors and this company is considered to be pre revenue so what does that mean exactly while nikola motors doesn’t have a product to sell yet so they have no means of deriving revenue they did have a very negligible amount of revenue that came from engineering contracts but this is not a company that is anywhere near turning a profit

And they haven’t even sold any products yet but because investors are so excited about the future growth potential of this company a lot of that future growth is priced into today’s number so we essentially have a company with a valuation of over 20 billion dollars that hasn’t had revenue come in yeah now one thing investors focused on was this line right here

From their press release it says niccola’s pre-orders represent more than 10 billion dollars in potential revenue and they have a very exciting deal with anheuser-busch which seems like it could be great for this company but when you look into the pre-order situation here you realize that they did not have any type of commitments for these orders and there was no

Deposit so a better way to look at this is that there’s 10 billion dollars of open interest of companies purchasing the niccola semi-trucks now just like when tesla started out this company is expected to lose money year after year in fact since founding in 2015 they have lost 188 point five million dollars and that is expected to continue but the important part is

Here through this reverse merger they were able to gain access to capital and issue more shares as you can see here it says nikola was able to raise more than 700 million dollars the exact figure is around 735 million and that is capital they have access to in order to basically develop these trucks and eventually be able to derive some kind of revenue from selling

These vehicles so right now anybody investing in this company is banking on the fact that they’re going to develop a product that people want to purchase and down the road after losing money they will eventually be able to do what tesla has done and have some type of profitability which should grow over time after all this upfront investment in technology as well

As production and things like that now it’s important to understand that nikola is forecasting zero dollars in revenue in 2020 but one billion dollars in revenue by the year 2023 so that is what they are looking to achieve even at 1 billion dollars in revenue however that is a very small amount compared to the revenue that their key competitor tesla is currently

Doing coming in at around 25 billion for 2019 alright so now let’s talk about the different products these companies are offering because this is where we start to see some key differences between tesla and nikola motors right here on tesla’s website we can see one of the key differentiators and that is the fact that tesla is involved in the solar business now

Both nikola and tesla are involved in energy generation and energy storage but it’s very different types of clean energy back in 2016 tesla actually acquired a company called solar city which has allowed them to enter the solar business and this all lumps in together because this allows people who have tesla vehicles to charge their vehicle with solar for 100%

Clean and renewable energy on the other hand nikola motors is also involved in the energy business but instead of using electricity they are also using hydrogen fuel cells so tesla operates in two different business segments first of all the one that people are most familiar with which is automotive and the second segment is energy generation and storage so tesla is

Essentially developing the solar panels that you can see here on this house as well as the energy storage systems here leveraging their battery technology now their most successful product and the most well-known one is their passenger vehicles and this is very interesting because when we take a look at the line up here for nikola motors they’re not going after this

Market at all so far down the road it’s unclear whether or not they will but right now tesla is not competing with nikola motors in that sense the only passenger vehicle they’re going to be offering out of the gate is this truck here called the nikola badger it is a passenger truck and it competes with the tesla cyber truck but they do not offer any passenger cars

Currently and they don’t have any in their lineup now here’s where there is some direct competition between nikola and tesla and that is in the commercial trucking industry with the tesla semi tesla is going to be releasing a semi truck and that is the core market that nikola is going after the only big difference here is that tesla is 100% electric while nikola

Is going to offer both electric as well as hydrogen fuel cell trucks and some that utilize both types of energy so right now it’s important to understand that the only products that tesla is selling right now is their passenger vehicles as well as their solar panels and their batteries oranges they don’t sell the semi-truck yet and they don’t offer the cyber truck

Yet either so now when we take a look at nikolai motors here we can see what their core business is first of all the motor company which is going to be the semi trucks as well as that nikola badger and then very similarly here to tesla they’re also an energy company but instead of just involving electricity they are mostly focused on hydrogen fuel cells and lastly

We have power sports which is pretty interesting because it’s not really a market tesla is going after except for the tesla atv which we will cover shortly and it is funny because i read that elon musk referred to hydrogen fuel cells as fuel cells he doesn’t believe in the technology but it’s also funny because the ceo of nikola motors has said that nikola the

Company actually loves tesla and he says if you take a look at their parking lot on a given day a lot of people drive tesla vehicles so the idea of these companies being direct competitors i think the more and more we dig into what they’re actually doing the different business models and the products we can see that these companies will very likely be able to

Coexist with each other since they are going after different markets there is of course some overlap here with the semi trucks as well as the tesla cyber truck and the nikola bajor and as mentioned tesla is looking to offer an atv which is going to be what they are doing here as well with power sports but there are also some key differentiators in terms of the

Products being offered so under the nikola motor company they’re going to be offering three different semi trucks as well as that nikola badger which is the passenger truck the very first one they’re going to release here is the niccola tray and the nikola badger these two are going to come down the line once they build their production facility in arizona but

We’ll cover that shortly then we have the energy company and this is where we’re going to see massive investment of capital in nikola building out a network of hydrogen fueling stations and this right here is a map of where nikola motors is going to build these fueling stations at a cost of around 15 to 20 million dollars a pop because if they are offering hydra

You will sell semis they need to offer fueling stations very similar to the tesla charging stations that are now all over across the united states now this is of course a massive capital investment but nikola motors was just able to raise around 700 million dollars which should help them out now nikola motors doesn’t just want to offer these fueling stations they

Also want to be in the energy generation business so they want to generate the energy convert it into hydrogen fuel cells on-site offer rapid charging and pretty much have this be a one-stop shop that is fully self sustainable and with zero emissions now what’s interesting here is that they are claiming that with hydrogen fuel cells it is going to be a much faster

Process for refueling these vehicles according to this snippet right here heavy duty fast fueling with hydrogen is being developed by nikola with an industry consortium with unique hd hardware standardized to fill in less than 15 minutes similar to diesel today now if they’re going after the commercial market it’s very important that it’s comparable to diesel

In terms of phillip time since a lot of these truck drivers are paid by the hour it wouldn’t be cost-effective for them to be sitting there for an hour while they charge their batteries now there’s a lot more to this in terms of looking at electric vehicles versus hydrogen fuel cells that is well above and beyond my knowledge so that’s the extent we’re going to

Cover here but it’s two different schools of thought and two very different technologies so you have tesla all in on the electric market and nikola in a blend here of both hydrogen fuel cells and electric battery operated vehicles now lastly we have the nikola powersports which is very interesting because this is a segment that tesla doesn’t seem to be going after

Except for releasing an atv which is different than these vehicles and potentially a motorcycle down the road now nikola calls these ohp s or off highway vehicles and they’re going to be offering them to both civilians as well as for military applications essentially you have this nikola nzt which is designed for use for basically civilians and then you have the

Nikola wreckless which is going to be for more military application so obviously if nicola could get the us government to purchase millions of dollars of this vehicle that would be very beneficial to that company and similar to a situation where you have a company like boeing benefiting from government contracts for things used in military applications and then

The last vehicle they have here under the off-highway vehicles is the niccola wave which is a jetski which is 100% electric same with the last two off highway vehicles we looked at now the last thing i want to cover here in terms of the differences between these companies is production tesla produces and manufactures all of their vehicles in these factories they

Are massive investments that cost around half a billion dollars and they have a few of these in different parts of the world nikola motors on the other hand doesn’t plan on producing their first vehicles themselves which is a very interesting decision so the first vehicles they’re going to release are the niccola badger which is the passenger truck and according

To this article right here they’re in talks with three established automakers over a deal to who is going to build this vehicle for them so rather than investing hundreds of millions of dollars into factories to build these vehicles initially they’re going to rely on somebody who already has those factories built this is going to allow them to save a lot of money

And they’re not going to have to build a factory right out of the gate to produce these first vehicles that they offer and then as far as the commercial market goes here the first truck they’re going to release is the trey semi truck which is the smallest one it is 100% electric and they’ve already made a deal with an italian truck manufacturer to manufacture this

Vehicle for them for sale in europe another key differentiator here between these companies is that nicola is including a full package here of both the vehicle as well as service and fuelling so if you purchase a nickel a semi truck what you’re paying for includes all of the service and all of the fuelling at the stations however they are not interested in the

Service business so they are going to be farming that out as well right now they have deals with ryder and thompson machinery for completing that service-related work and maintenance now down the road nicola is going to be involved in the production of their vehicles in particular the hydrogen fuel cell semis and they’re breaking ground on their arizona factory in

July now this is going to be a 12 to 18 month project so essentially what they’re doing is having other well-established manufacturers building the initial launch vehicles and then taking that money and taking their time to build their factory in arizona so anyways guys there you have it those are the key differences between nikola motors and tesla a lot of people

Think they’re basically the same company and that there can only be one winner here but in my opinion based on the research i’ve done i think both tesla and nikola can thrive based on the key differentiators between these companies let me know what you guys think down in the comment section below i would love to hear what your thoughts are on both nikola motors

And tesla motors and as mentioned earlier if you guys want to grab those two free stocks from weeble that is the top link down in the description below but thanks so much for watching guys i hope you enjoyed this video and i will see you in the next one

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Tesla Stock vs Nikola Motors Stock (TSLA vs NKLA) By Ryan Scribner