What happened
Shares of Nikola (NKLA +0.00%) jumped 2% in 1 p.m. EDT trading Thursday after the battery and fuel cell-powered semi truck manufacturer announced it has signed "strategic agreements" with Germany's Bosch Group to supply fuel cells for its trucks.
So what
As detailed in Nikola's press release, Bosch will license to Nikola the former's fuel cell module technology, and supply "key components ... including the fuel-cell stack, air compressor with power electronics and control unit with sensors." Nikola will then take these parts and assemble them into fuel cell modules at Nikola's manufacturing facility in Coolidge, Arizona, where it will also be manufacturing its own "Tre" fuel cell-powered electric trucks.
Financial terms of the licensing agreement were not disclosed, beyond Nikola's assertion that using Bosch's fuel cells will give its vehicles "competitive cost ... advantages."
Image source: Getty Images.
Now what
Manufacturing of the trucks and the fuel cells to power them will begin in 2023, says Nikola, following the production and testing of a few "Tre FCEV alpha vehicles utilizing the fuel-cell power modules" that is expected to begin by the end of 2021.
In short, it was an incrementally positive press release, but hardly a game changer. Nikola shares, which initially leapt more than 6% in response to the news, have already given up the majority of their gains -- and I suspect that's the right call.
