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Nikola Corp. announced that the company is no longer developing an electric garbage truck with waste management firm Republic Services.

Why it matters: It's the latest of several setbacks in recent months for Nikola, the once high-flying battery electric and hydrogen fuel cell truck company that went public mid-year in a reverse merger. Republican had placed a preliminary order for at least 2,500 vehicles in August.

Driving the news: "[B]oth companies determined that the combination of the various new technologies and design concepts would result in longer than expected development time, and unexpected costs," Nikola said in a statement.

Catch up fast: The announcement comes three weeks after General Motors dropped plans to take an equity stake in Nikola and build its Badger pickup truck, a vehicle that's now mothballed.

  • Under their revised agreement, GM will still be a key tech supplier for Nikola's planned line of electric and fuel cell heavy trucks.
  • More broadly, Nikola has faced a rocky road in recent months. Founder and executive chairman Trevor Milton stepped down in September following allegations over misleading or inaccurate statements.

Our thought bubble: Via Axios transportation reporter Joann Muller...This is a reminder to investors who have scooped up newly minted stock in various electric vehicle startups this year that searching for the next Tesla is a risky proposition. 

Nikola might yet succeed in hydrogen fuel cell trucks — its original idea — but the sky-high valuation assigned by Wall Street was based on hype. Investors beware: an EV bubble is a real possibility.

What they're saying: Wedbush Securities analyst Dan Ives, in a note, called the cancelled garbage truck order a "'gut punch' for investors that were hoping this monster order was a potential paradigm changer for Nikola."

  • But Nikola, in the announcement, emphasized that's plans for semi-trucks are going forward, including a target to begin U.S. deliveries of its Nikola Tre model next year.
  • "Nikola remains laser-focused on delivering on our battery-electric and fuel-cell electric commercial truck programs, and the energy infrastructure to support them," CEO Mark Russell said in a statement.

Go deeper: Wall Street is searching for electric vehicle gold

Go deeper

General Motors joins the race to electrify package delivery

Illustration: Eniola Odetunde/Axios

General Motors is launching a new business unit devoted to electrifying the goods delivery market and says package giant FedEx will be the first customer.

Why it matters: Big automakers and startups alike see a huge opportunity.

16 mins ago - Politics & Policy

Stalemate over filibuster freezes Congress

Illustration: Sarah Grillo/Axios

Senate Majority Leader Chuck Schumer and Mitch McConnell's inability to quickly strike a deal on a power-sharing agreement in the new 50-50 Congress is slowing down everything from the confirmation of President Biden's nominees to Donald Trump's impeachment trial.

Why it matters: Whatever final stance Schumer takes on the stalemate, which largely comes down to Democrats wanting to use the legislative filibuster as leverage over Republicans, will be a signal of the level of hardball we should expect Democrats to play with Republicans in the new Senate.

Dave Lawler, author of World
43 mins ago - World

Biden opts for five-year extension of New START nuclear treaty with Russia

Putin at a military parade. Photo: Valya Egorshin/NurPhoto via Getty

President Biden will seek a five-year extension of the New START nuclear arms control pact with Russia before it expires on Feb. 5, senior officials told the Washington Post.

Why it matters: The 2010 treaty is the last remaining constraint on the arsenals of the world's two nuclear superpowers, limiting the number of deployed nuclear warheads and the bombers, missiles and submarines which can deliver them.