(Bloomberg Opinion) -- When Nikola Corp. started trading on Nasdaq in June, the Phoenix-based clean transportation company raced quickly to a valuation of almost $30 billion.

Its market worth has since fallen to a more reasonable $10.5billion, but thats still pretty spicy for a business yet to generate any revenue. Its most promising products are its heavy trucks, powered by electric batteries or hydrogen fuel cells.

The rise of Nikola (whose name, cheekily, is another evocation of electrical engineer Nikola Tesla) will have reinforced a view among European auto industry executives that the U.S. stock market operates by different rules. While Tesla Inc. is only modestly profitable, its valued at about $275billion, more than Europes five largest carmakers combined.

At least Europe has a stake in the latest heavily hyped project.Founded by Trevor Milton, a 38-year-old American college dropout, Nikola is relying heavily on expertise from the old continent. Robert Bosch Gmbh, a German automotive supplier, has helped develop the U.S. companys electric powertrain, and the first Nikola trucks will be built in a German factory belonging to Italys Iveco, a truck maker backed by the billionaire Agnelli family. Bosch and Iveco each own more than 6% of Nikola.CNH Industrial NV, Ivecos parent, just recorded a $1.5 billion fair value gain on that investment.(1)

The biggest question is whether a start-up dependent on so much external help should have a whizzy valuation like Tesla, which builds much of its technology itself.And if Europe has this expertise, why hasnt it produced its own rival to Elon Musks carmaker?

Maybe its a lack of chutzpah. Nikolas name isnt the only reason its often compared with Tesla. Miltons hyperactive Twitter presence makes Musk look tame by comparison. Both mens ambitions extend beyond selling zero-emission vehicles to producing and storing clean energy. While Nikola is focused on heavy-duty trucks, it has touted a variety of consumer products including a pickup called the Badger. These are catnip for retail investors, as the excitement over Musks Cybertruck demonstrates.

While Tesla and Nikola are both working on electric heavy trucks, they differ in at least two important respects. The first is hydrogen: Musk is dismissive, while Milton thinks hydrogen is the perfect fuel for long truck journeys. The second is their attitude towardbuilding stuff in-house.

True, in its early days Tesla worked withLotus to help make the Roadster, and Daimler AG helpeddevelop the Model S saloon. Teslapartners with Panasonic to produce battery cells. But Musk is famous for trying to build his own technology, from electric powertrains and automated-driving software to car seats.

Nikola developed its own software,infotainment andbattery management-system, as well as vehicle aerodynamics, according to Cowen analyst Jeffrey Osborne. It has outsourced or used hired help to do much of the other stuff.More than 200 Bosch employees were involved in building important parts of Nikolas trucks, including the electric motor for the axle, the vehicle-control unit, the battery and the hydrogen fuel cell. The result isa mix of intellectual property owned either separately orjointly by Nikola and its suppliers.

Theres no doubt, however, who has the deeper expertise.So far Nikola has been awarded 11 U.S. patents, about 1% of the totalBosch is awarded in a typical year. Bosch gets paid to help us get to industry standards on products, Milton told me.

Getting partners to providethe technological building blockshas some advantages. Nikola has only 300 employees and yet its first trucks should start rolling off theproduction line soon. Working with partners cuts the risk of the manufacturing delays and quality problems that plagued Tesla.

Its an efficient use of capital too. Nikolas research and development expenses were just $68million last year. Tesla spent$1.3 billion. After going public, Nikola has about $900 million of cash,although that wont go far in the automotive business. Forthe North Americanmarket, Nikola plans to handle its own manufacturing, with technical assistance from Iveco. Nikola broke ground this week on a$600 million factory in Arizona.

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Whether or not you believe the extensive involvement of outside partners shouldhave a bearing on its lofty valuation, there are other things that could upset Nikolas plans.

Building a refueling network is a central part of its business model, but this wont come cheap at $17 million for each hydrogen station. The company is also entering a competitive field populated by more experienced and better capitalized rivals. Daimlers Mercedes-Benz failed to follow through on its early experiments with electric cars and let Tesla roar past. It probably wont make the same mistake withtrucks.

Daimler is the worlds largest truck maker and it plans to start production of its electric eActros and eCascadia models next year. The German giant has alsoformed a joint venture with Swedens Volvo AB to develop hydrogen fuel cell systems for heavy vehicles. That venture is valued by the companies at just 1.2 billion euros ($1.4 billion), putting the Nikola valuation into perspective.

Even if its share price looks overblown, Nikolas improbable rise shows theres investor demand for clean transportation companies that dont still have one foot planted in the combustion-engine past. European manufacturers have the technicalchopsbut they must find better ways to capitalize on investor excitement through new business models or spinoffs. Otherwise someone else will.

(1) This was measured on June 30 when Nikola's stock was much higher

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.

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