The Detroit 3 are doing things all wrong.
Their executives, clueless as always, are focused on pointless metrics such as sales, revenue and — worst of all — profits.
Don’t they get it by now? That’s no way to impress Wall Street.
So Ford Motor Co., on average, built an F-150 every 45 seconds last year. Who cares?
Nikola Motor, an electric vehicle startup named for the part of Nikola Tesla’s name that Tesla didn’t use, built zero production-ready trucks last year. It’s still building zero today.
Now that’s the kind of rock-solid consistency that investors can get behind. And did they ever last week, when Nikola’s market cap surpassed that of Ford and Fiat Chrysler Automobiles.
Nikola has no sales, no revenue and nothing even remotely resembling profits. What it does have is founder Trevor Milton, with big ambitions, plenty of confidence and a Twitter account he used last week to share his views on “what legacy automakers don’t understand.”
It’s all straight from the Tesla playbook, right down to the name of the company. And why not? The strategy is working great for Tesla, which also has managed to avoid any direct link between its stock price and its financial performance.
Tesla shares last week topped $1,000 for the first time — quadruple their value a year ago — after it responded to Nikola’s gangbusters public offering by saying it was close to building the semitruck it’s long been talking about. Tesla CEO Elon Musk didn’t exactly make production sound imminent — most components aside from the Nevada-built battery and powertrain would “probably” happen in other states, he said — but he still got the stock to jump, as intended.
Nikola plans to officially reveal its electric pickup, the Badger, and start taking preorders for it later this month. Milton, having already gotten his zero-revenue company to beat Ford in value, also is taking aim at Ford’s most important vehicle.
“My goal is to take the throne from the Ford F-150,” Milton, who shifted from CEO to executive chairman, told Yahoo Finance.
It’s a long way from zero to No. 1 in the industry. But, rather than debate whether Nikola could actually do it, the reaction in Detroit should be: So what?
As Wall Street has made clear, nobody cares about sales.
You may email Nick Bunkley at [email protected]
