Shares of Nikola (NKLA -3.61%) were up more than 5% Tuesday morning before giving up some of those gains. As of 2:15 p.m. EST, the stock had gained about 2.5%.
The early jump wasn't just from typical volatility in the controversial name, though.
Though Nikola's first production vehicle is slated to be the battery-electric Tre semi truck, the long-term investing thesis for Nikola will require success with its hydrogen fuel cell-powered Two model as well. Last Friday, the U.S. Department of Energy (DOE) announced plans of federal funding for hydrogen fuel technology development.
Some of the hope, and early hype, for Nikola was based on developing hydrogen fueling technology and infrastructure. Last week, the DOE announced $160 million in funding "to develop technologies for the production, transport, storage, and utilization of fossil-based hydrogen, with progress toward net-zero carbon emissions."
Specific objectives include developing new, or modified, solid oxide electrolysis cell technology; improving natural gas-based hydrogen production; and making hydrogen pipeline and storage infrastructure more efficient in cost and performance.
Nikola has touted its plans for both battery-electric and hydrogen fuel-powered vehicles. Cost-effective hydrogen fueling technology is an area that investors have continued to question. But a recent agreement with a utility for hydrogen production and more federal support for the technology have shares bouncing off lows from late last year. Investors that hold the stock know that it is still a speculation, but every push toward more use of hydrogen fueling technology is a potentially positive long-term development.