After dropping nearly 10% yesterday from its quarterly financial update, shares of Nikola (NASDAQ:NKLA) bounced back Wednesday morning. As of 11 a.m. EDT, shares were up 5.7%, after having jumped as much as 7.4% earlier. It seems investors are turning their focus from negative comments related to shorter-term issues to the longer-term potential raised in another earnings report yesterday.
Nikola announced yesterday that supply chain disruptions caused it to lower projections for battery electric semitruck production, and therefore revenue targets, for this year. But the company's long-term plans involve a broader adoption of hydrogen fuel-cell electric vehicles, and industrial power giant Cummins (NYSE:CMI) focused on the growth of a hydrogen economy in its earnings conference call yesterday.
Cummins, known for being a leader in diesel-powered engines, commented that in its second quarter, it entered into a partnership seeking to "accelerate the growth of business opportunities ... promoting the green hydrogen value chain." It also said it started testing a hydrogen-fuel internal combustion engine.
Nikola has said from its inception that it seeks to grow a hydrogen fuel economy, and it told investors that it still plans to begin construction on its initial commercial hydrogen station and/or a centralized hydrogen production facility by the end of this year, as well as announce new partnerships to advance hydrogen infrastructure. In June, Nikola acquired a 20% interest in a clean hydrogen project under construction in Indiana.
Cummins' comments in its earnings conference call that it supports "hydrogen as a decarbonizing solution for transportation and industry" likely gives investors some confidence that Nikola's plans are mirrored by another major player in the transportation sector.