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Why Nikola Stock Just Popped

By Rich Smith – Sep 2, 2021 at 1:40PM

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Bosch is on board to supply fuel cell tech to Nikola.

What happened

Shares of Nikola (NKLA 9.62%) 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."

Arrow angles up on a green stock chart.

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.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Nikola Corporation Stock Quote
Nikola Corporation
NKLA
$2.85 (9.62%) $0.25

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