Nikola and Republic Services demolish their electric garbage truck

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In August, the company announced plans to produce as many as 5,000 trucks for Republic Services, which has sought to build a more sustainable fleet of garbage trucks to better meet emissions standards. Nikola (NKLA) Shares shot up 22% after the deal was originally announced.

But Nikola’s stock price fell 10% Wednesday morning after the deal was publicly canceled. Wedbush analysts gave Nikola an “ underperform ” rating in response to the announcement, which the company said was an “ instinctual punch ” to investors who believed the deal with Republic Services would be a breakthrough for the struggling startup.

“Given the flood of bad news for Nikola in recent months, this was not the news investors wanted to see under their Christmas tree,” Wedbush analyst Dan Ives wrote in a note to investors Wednesday morning. “The company still has a Kilimanjaro-esque climb up to regain Street’s credibility towards 2021, with today’s news seen as another step back,” the company added.

Nikola said both companies agreed to cancel the deal after deciding to combine new technologies and design concepts to make the electric trucks last longer and cost more than initially expected.

“This was the right decision for both companies given the resources and investment required,” Nikola CEO Mark Russell said in a written statement.

Nikola's deal to mass produce garbage trucks (pictured) for one of the country's largest waste disposal companies was officially canceled on December 23, 2020.
Republic Services confirmed via email that the deal with Nikola has “ended,” noting that it is continuing its electric vehicle partnerships with truck manufacturers Mack, Peterbilt and California battery startup Romeo Systems, in addition to making more vehicle purchases next year .

“We continue to believe that electrification is the future,” said the waste management company. We believe the opportunity to learn from and collaborate with Romeo will continue to provide additional opportunities to support our electrification strategy. “

In September, Nikola’s founder, Trevor Milton, was charged with fraud by the financial research firm Hindenberg Research for exaggerating the capabilities of the Nikola One hydrogen-fuel cell electric semi-truck, although CNN has not independently verified the claims made in Hindenburg’s report. Milton resigned as executive chairman of the company and one of the board members in the aftermath of the scandal.
The Securities and Exchange Commission and the Department of Justice sued both Milton and Nikola on Nov. 9. The company’s stock fell 20% in late November, after General engines (GM) has rejected its plans to produce Nikola’s Badger pickup.
Wall Street has been optimistic about electric car makers for much of 2020, despite setbacks for some of the major companies producing the vehicles, as trucking companies work to better meet government emissions standards.

Nikola also said on Wednesday that US deliveries of its Tre battery-electric semi-trucks will begin in 2021. The company plans to launch its first commercial hydrogen station next year. Production of its hydrogen fuel cell electric semi-trucks is scheduled for 2023.

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