What happened
Nikola (NKLA -3.23%) has been making progress with growing sales of battery-electric heavy trucks and the coming launch of its hydrogen-fueled versions. But that hasn't stopped the stock from dropping to new all-time lows.
This week, the stock dipped below $1 per share and is hovering about 20% below last week's closing price, according to data provided by S&P Global Market Intelligence.
So what
Shares have steadily declined since the company announced it was raising $100 million by issuing common stock at a significant discount to the then-market price two weeks ago. The stock has now dropped below $1 per share after that offering was priced at $1.12.
Though investors knew the company would be raising new capital at some point, the pricing was disappointing. But there is also a more fundamental reason investors have been fleeing Nikola stock.
Real competition has now begun from EV leader Tesla. This week, PepsiCo held an event to highlight its new fleet of 18 Tesla Semi trucks. PepsiCo is the first customer to receive the heavy electric trucks from Tesla. Nikola now has a formidable competitor in the market.
Now what
Nikola isn't just facing a strong competitor with deep pockets. Tesla might also have a product that customers prefer. Pepsi said its Tesla Semis can travel 400 miles on a one-hour charge. Nikola says the maximum range for its battery-electric truck is 330 miles on a single charge.
Nikola does expect its hydrogen-electric trucks to be available by the second half of this year. The company -- and investors -- might need to see the popularity of that offering take off for the company to achieve long-term success. It is already adding partners to build out the hydrogen fuel infrastructure needed for that fleet.
This week, however, investors were focusing on its battery-electric option and the formidable competition it now faces.
