JPMorgan provided an optimistic evaluation for electric vehicle startup Nikola on Monday, saying that it expected the upcoming 2021 calendar year to be “less drama-filled” for the company compared to the 2020 calendar year. Nikola stock value jumped 16 percent following the JP Morgan evaluation. However, the financial services company later downgraded its Nikola stock price target from $40 to $35. The downgrade still represents a potential upside of 155 percent from last Thursday’s closing price.
In a note issued on Monday, JPMorgan said that it expects the 2021 calendar year will “turn generally positive” for Nikola, saying that the EV startup had “cleaned house” prior to the close of 2020, withdrawing from a pair of partnerships that “were hastily thrown together by the founder, and committed NKLA resources to non-strategic initiatives.”
The partnerships referenced include a collaborative effort with General Motors. Back in September, Nikola and GM entered a strategic partnership in which The General would receive a $2 billion stake in the startup in exchange for engineering and producing the Nikola Badger electric pickup, as well as providing electric battery and hydrogen fuel cell for Nikola’s Class 7 and Class 8 semi-trucks.
However, Nikola and GM later signed a non-binding memorandum of understanding wherein General Motors would only supply Nikola with hydrogen fuel technology.
Nikola also axed a deal with Republic Services to develop electric garbage trucks.
Nikola stock value fell sharply in September following claims that company founder Trevor Milton had overstated the EV company’s tech capabilities. In a report from Hindenburg Research titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America,” it’s claimed that Nikola’s battery system tech doesn’t exist, and that existing vehicle components framed as Nikola’s were actually purchased from other companies.
The report arrived mere days after the announcement of Nikola’s strategic partnership with GM, during which Nikola stock value soared 41 percent.
Now, Nikola appears to be focused on developing its hydrogen and battery-electric commercial trucks, including the Nikola Tre, a Class 8 semi-truck, with investors keen on seeing major milestones met throughout the 2021 calendar year.
“We expect Nikola to post a video of a functioning Tre in January,” JPMorgan said.