Navigating uncertainty: M&A strategies for mitigating "range anxiety" and promoting heavy truck electrification – a case study of Nikola Corp. and Romeo Power Inc.

In response to the escalating threat of climate change, urgent measures are required to curb greenhouse gas emissions and foster sustainability. In 2022, the transportation sector represented almost 25% of total Greenhouse emissions (GHG) worldwide, signal of the complex relationship between transportation emissions and environmental well-being. Heavy trucks deserve particular emphasis as they represent 30% of total transportation CO2 emissions, 50% of on-road freight transport emissions, and 5% of global total emissions, despite constituting only 1% of the vehicle population. Climate change consequences are evident today as never before, and GHG emissions are very likely to drastically impact peoples’ future worldwide if any route change is rapidly taken. This dissertation, transitioning seamlessly from the theoretical underpinnings to a real-world case study, endeavors to unravel the intricate motivations, challenges, and outcomes characterizing contemporary M&A trends in the electric automotive sector, especially for battery electric trucks (BETs). Shedding light on the dynamic forces propelling the long-haul trucks industry into its electrifying future, the main objective is to understand the literature cutting edges and how the market has moved so far. Through meticulous analysis of the existing bibliography, industry trends, and empirical data, this study highlight the critical importance of addressing range anxiety and overcoming barriers to BET adoption. By delving into the challenges and opportunities associated with BETs, it provides valuable insights into the transformative potential of electric-powered mobility. Once the problems hampering the BETs’ diffusion are scrutinized and some viable strategic solutions are examined, lens are pointed over what are the strategic decisions of a market player. Central to the dissertation is an in-depth exploration of strategic initiatives, including mergers and acquisitions (M&A), undertaken by industry players like the examined Nikola Corp. The business case uncovers valuable lessons and strategic recommendations for stakeholders as it underscores the significance of addressing range anxiety through advancements in battery technology and strategic M&A deals aimed at bolstering infrastructure. Vertical integration through M&A deals may have some large benefits for both company’s strategy and financials such as control, exclusive relationship, proprietary innovation, and resources inflation but this might not be enough to successfully complete it and offset deal’s costs. Despite faster than alternative alliances, M&As are much more expensive in terms of resources invested, valuation time, and integration effort requiring a solid strategic and financial starting point. By identifying research gaps and charting future directions, this dissertation offers a roadmap for advancing our understanding and accelerating the transition towards a resilient and sustainable future. In conclusion, it represents a significant contribution to the field of sustainability and transportation, providing actionable insights and a vision for a greener tomorrow. Ultimately, this dissertation advocates for a holistic approach to sustainability, highlighting the need for synergistic efforts across various fronts, including renewable energy integration, infrastructure development, and policy frameworks.