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One of the former hottest 2020 SPACs continues to fall as it loses deals and partnerships.
What Happened: Former SPAC Nikola Corporation (NASDAQ:NKLA) announced Wednesday that it's ending its collaboration with Republic Services (NYSE:RSG).
The companies have discontinued a deal that was meant to build the industry’s first fully integrated truck based on a zero-emission battery electric drive platform and body.
Both companies said the deal would have resulted in a longer-than-expected development time and unexpected costs.
Republic Services is planning on switching its refuse trucks to electric in the future.
“They have 16,000 trucks that need to be electrified,” Romeo Power CEO Lionel Selwood Jr. previously told Benzinga.
Romeo Power is merging with the SPAC RMG Acquisition Corp (NYSE:RMG).
Related Link: What Investors Need To Know About The GM-Nikola Partnership
Why It’s Important: The news of this partnership ending follows the revision of Nikola’s deal with General Motors Company (NYSE:GM), which saw the large automobile company declining to take equity in Nikola.
Nikola used the Republic Services and General Motors deals as part of its rebuttal to a Hindenburg short report. Neither deal panned out as originally planned by Nikola.
Nikola said the companies it partnered with did their due diligence.
'Gut Punch' For Nikola Investors: Wedbush analyst Daniel Ives said Wednesday's news is “tough pill to swallow for the bulls.”
The analyst maintained an Underperform rating on Nikola and $15 price target.
“In a nutshell, this is a gut punch for investors that were hoping this monster order was a potential paradigm changer for Nikola and reference customer going forward,” the analyst said in a note.
Nikola Announces EV Timelines: Nikola announced Wednesday it will begin deliveries of its Nikola Tre battery electric semi trucks in the United States in 2021. The company also said it is planning to break ground on its first commercial hydrogen station in 2021.
Nikola said its fuel cell electric semi trucks will be produced at an Arizona facility beginning in 2023.
NKLA Price Action: Shares of Nikola were down 8.69% at $15.37 at last check.
Photo courtesy of Nikola.
