By Christiana Sciaudone
Investing.com -- It's been a tough year for one of the brightest prospects on the market. Nikola Corp (NASDAQ:NKLA) is down 9% Wednesday after saying its collaboration with Republic Services (NYSE:RSG) is kaput.
The news comes following accusations of fraud raised by short-seller Hindenburg and the subsequent resignation of founder and once-chairman Trevor Milton. Just days before those accusations in September, General Motors (NYSE:GM) had announced a deal to take a $2 billion, 11% stake in Nikola. That has since been nixed and plans to build a truck together, the Badger, were scrubbed. GM now has a nonbinding memorandum of understanding to supply fuel-cell technology to Nikola, according to CNBC.
The goal of Nikola's collaboration with Republic was to design and build a refuse truck based on a zero-emissions battery-electric drive platform and body. The companies decided it would take longer than expected to develop, and unexpected costs arose.
“This was the right decision for both companies given the resources and investments required,” said Nikola Chief Executive Officer Mark Russell. “Nikola remains laser-focused on delivering on our battery-electric and fuel-cell electric commercial truck programs, and the energy infrastructure to support them.”
The Republic order put a well-known name to what has otherwise been a vague number of 14,000 "reservations" touted by the company, all of which are subject to cancellation -- as Wednesday's news showed.
Nikola expects to begin delivery of Tre battery-electric semi-trucks in the U.S. in 2021, when it should also break ground on its first commercial hydrogen station. The company’s fuel-cell-electric semi-trucks will be produced in Coolidge, Arizona, beginning in 2023.
Nikola went public in June through a reverse merger with a special purpose acquisition company, and jumped to a record of almost $80. It is now trading around $15.