Two of the most well liked names in electrical car stocks are truckmaker Nikola (NASDAQ: NKLA), shares of that are up greater than 200% over the previous month, and carmaker Tesla (NASDAQ: TSLA), whose stock just lately crossed the $1,000/share threshold. These corporations share one thing in addition to a sector, although: Additionally they share a namesake.
Each are named after turn-of-the-century Serbian-American inventor and physicist Nikola Tesla (1856-1943). However… why?
This is the actual purpose these two corporations have chosen the identical obscure scientist as their namesake, and what Tesla’s life story can inform buyers about these corporations.
Nikola Tesla was born in Serbia; his portrait seems on some Serbian 100-dinar notes. Picture supply: Getty Pictures.
Mad genius continues to be genius
Tesla was a pioneer in electrical engineering (in addition to radio, however we can’t get into that). His most important invention was alternating (AC) electrical present, through which the move of electrons periodically adjustments route, versus direct (DC) present, through which electrons journey in a single route.
Tesla briefly labored for the legendary Thomas Edison, who was a proponent of DC present, however the two had a falling out. So Tesla partnered with Edison’s rival George Westinghouse to develop AC present, sparking (no pun meant) the “present wars.” Ultimately, the superior AC present received out, and is now the usual type of electrical energy that powers U.S. houses and companies (and electrical automobiles).
Tesla was eccentric, to place it mildly. He made weird claims, together with that he had constructed a “demise ray” that would destroy airplanes from 250 miles away, and that he may talk with New York Metropolis pigeons.
Though Tesla had made loads of cash by way of his partnership with Westinghouse, he obtained into monetary bother when funding ran out for a few of his main initiatives, like a large wi-fi communications tower on Lengthy Island. Though well-known, he died penniless in 1943.
What’s in a reputation
Quick ahead 60 years and engineer Martin Eberhard is making an attempt to give you a reputation for his electrical automobile firm. Up till that time, electrical vehicles had nearly all been glorified golf carts, however Eberhard envisioned a real efficiency car that may change how folks seen electrical vehicles. So he did not need the identify to sound too “inexperienced.”
He’d been pitching concepts to his then-girlfriend (now spouse) Carolyn for months, however she hadn’t appreciated any of them till he proposed the identify “Tesla Motors” in honor of Nikola Tesla. She reportedly replied, “Excellent! Now get to work making your automobile.”
Eberhard’s co-founder Marc Tarpenning appreciated the identify (present CEO Elon Musk hadn’t but joined the corporate) and secured the area teslamotors.com in 2003. An early model of that web site defined the identify alternative thusly: “With out Tesla’s imaginative and prescient and brilliance, our automobile would not be potential.” In a 2018 interview, Musk recalled that he and the founders found that the identify “Tesla Motors” had already been trademarked within the U.S.; they purchased the rights in 2004 for $75,000.
Much more applicable
Nikola’s founder Trevor Milton named his firm after Nikola Tesla too, however the alternative appears much less to honor the electrical energy pioneer and extra to piggyback on the identify of the already-successful Tesla Motors. Apparently, Milton’s earlier ventures ended equally to a few of Nikola Tesla’s.
Milton based Nikola in 2014 after departing pure fuel storage expertise firm dHybrid Techniques. He says that an investor was stealing dHybrid’s mental property, a lot as a few of Tesla’s patents had been infringed upon by Guglielmo Marconi and others. Milton’s earlier enterprise, an e-commerce firm known as Upillar, noticed early success however shut down when funding dried up, very similar to Tesla’s unfinished communications tower.
And, in fact, each Milton and Musk have raised eyebrows with a few of their extra provocative statements. Fortunately, neither is claiming they’ll speak to pigeons… at the very least, not but.
What buyers ought to know
The lifetime of Nikola Tesla is a cautionary story for buyers contemplating shopping for into the 2 corporations that bear his identify. The inventor ended up ruined when his large guarantees could not be fulfilled with the funding he’d secured.
Tesla Motors has additionally struggled to fulfill its lofty guarantees, notably by way of deadlines and profitability. Regardless of that, buyers had been greater than keen to throw ever-increasing quantities of cash at Musk & Co. If Nikola Tesla had solely been so fortunate, his story may need ended very otherwise.
Proper now, Nikola can be making lofty plans for gasoline cell-powered semi vans and pickups, plus a nationwide filling station community for its automobiles. However the firm hasn’t constructed a single truck, nor made a dime of income. Whether or not buyers are keen to stay with Nikola over the long run will decide whether or not it finally ends up like Tesla the person, or Tesla the corporate. Should you purchase in, you may wish to monitor Nikola intently.
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John Bromels owns shares of Tesla. The Motley Idiot owns shares of and recommends Tesla. The Motley Idiot has a disclosure coverage.
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
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