Fuel cell Class 8 startup Nikola going public with $3.3 billion valuation

Trevor Milton in Nikola 2 truck - Trevor Milton

Fuel cell Class 8 truck startup Nikola Corp. will become a public company with a $3.3 billion valuation in a merger with VectoIQ (NASDAQ: VTIQ), a startup holding company run by long-time Wall Street deal maker and former General Motors Co. Vice Chairman Steve Girsky.

Nikola will get $525 million to invest in its portfolio of zero-emission battery-electric (BEV) and hydrogen fuel-cell electric vehicles (FCEV). It also will get most of the $230 million value of VectoIQ, which searched two years for a merger partner.

The combined company will be named Nikola Corporation and is expected to remain NASDAQ-listed under the new ticker symbol “NKLA.” The deal needs approval by the U.S. Securities and Exchange Commission (SEC), which is expected in the next two months, Nikola CEO Trevor Milton told FreightWaves on Tuesday.

This is a developing story. Come back to FreightWaves.com for an update later today.

Phoenix-based Nikola also will use the money to build out a hydrogen station infrastructure to provide green fuel for its Class 8 trucks at a price competitive with diesel. Nikola has more than 14,000 pre-orders valued at $10 billion, including an order for 800 trucks from Anheuser-Busch.

Institutional investors, including Fidelity Management & Research Company, ValueAct Spring Fund and P. Schoenfeld Asset Management LP, committed $525 million to purchase shares in a private investment in public equity deal (PIPE deal), allowing them to purchase shares at a price below the current price available to the public.

PIPE deals are often offered by companies looking to raise a large amount of capital quickly.

Nikola recently entered a joint venture with European industrial vehicle manufacturer IVECO to build its Nikola Tre battery-electric truck for European customers. 

Milton said Nikola expects to generate revenue by 2021 with the roll-out of its Nikola Tre BEV truck, followed by fuel cell-powered truck sales starting in 2023.