What happened

Shares of electric-vehicle start-up Nikola (NASDAQ:NKLA) continued an extended price decline today, after dropping more than 50% in the last three months. As of 4:35 p.m. EDT Tuesday, Nikola shares were down more than 6% on the day.

So what

The electric-vehicle (EV) sector has been under pressure as lofty valuations and questionable business plans have driven investor sentiment away from pre-revenue companies like Nikola. Most recently, Wedbush analyst Dan Ives cut his price target almost in half to $13 from a previous $25. Ives wrote, "Overall we still believe the company's EV and hydrogen fuel cell ambitions are hittable in the semi-truck market, although we still have clear concerns that the execution and timing of these ambitious goals stay on track over the coming years."

Nikola semi truck tractor at hydrogen fueling station

Image source: Nikola.

Today, those hydrogen fuel cell ambitions might have investors feeling less comfortable about Nikola after Wells Fargo analysts offered mixed thoughts on the current state of several other hydrogen fuel solutions stocks.

Now what

Though it plans to initially produce battery electric vehicles (BEVs), Nikola is counting on building out a network of hydrogen fueling stations for a North American hydrogen fuel cell electric vehicle (FCEV) commercial truck program. Nikola doesn't expect to begin production of its FCEVs until 2023, but it has said it plans to support commercial freight operators with regional needs up to 300-mile routes, up to long hauls that need a range of up to 900 miles.

Until the company shows real progress with its hydrogen fuel cell products and needed infrastructure to support them, investors are likely to remain skeptical. With pessimism on the overall sector coming from several analysts, some investors are not waiting around.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.