Tesla has raised a lot of money and we will also have to raise money: founder Nikola

Founder of Nikola (NKLA) Trevor Milton does not pull punches on a possible capital increase to help fund the plans of the zero-emission truck.

“So now, we have about $ 900 million in cash in our account today. That we are financially very solid. I know a billion dollars in today’s world does not sound like a lot of money, but it is a lot of money. It’s a billion dollars in our account. We will eventually go out to the market for more capital. It will require one or two more [rounds], ”Milton told Yahoo Finance’s The First Trade.

As they say in the world of venture capitalism, Nikola is “pre-income.” What this essentially means is that the company today is taking orders for its products pending future revenue and profits. In its first earnings announcement as a public company on August 4, Nikola revealed that it had made a net loss of $ 119 million through the first six months of 2020 – largely because it has no revenue yet. The company has apparently never been profitable.

But a money increase sometimes appears in the next 24 months appears likely considering Nikola’s incoming order stream and these orders should be satisfied soon.

On Monday, Nikola announced a deal with waste management giant Republic Services for 2,500 zero-emission electric trucks. A dollar amount for the contract was not disclosed. The deal is expandable to 5,000 trucks. Full production shipments are expected to begin in 2023 – road testing is set to begin in early 2021 and early 2022.

Nikola shares rose 12% on the news Monday morning.

Meanwhile, Milton said Yahoo Finance’s orders for its semi-truck are well over 14,000 units valued at $ 10 billion in potential revenue. These trucks are planned to start production sometime in 2021. Start. The company has also taken an unknown number of deposits for its Badger electric pick-up truck. Milton says Nikola is close to announcing a production partner for the truck.

Milton says more capital increases should not come as a surprise. After all, Tesla has raised billions of dollars in capital through debt increases and common stock offerings.

“Tesla I think they raised between $ 10 billion and $ 20 billion to get where they are. It’s understandable that we’re going out [to raise capital]. But we also have a better business model. The model is based on profitability, not necessarily on speculation, ”Milton added. ‘I do not think we need to raise the amount needed because our actual business model is very, very profitable. We make almost a quarter of a million dollars on every truck we sell. That’s a lot of money. That we are just a completely different company than Tesla. ”