What happened
Good news for electric vehicle start-up Nikola (NKLA 2.10%) has been trickling out over the past couple of weeks. But that hasn't kept its stock from being pummeled along with many other speculative and growth companies in the tech sector. In this week alone, as of Friday morning, Nikola shares had dropped by more than 24%, according to data provided by S&P Global Market Intelligence.
So what
Nikola continues to announce progress in its business plans, so the recent sell-off in the stock doesn't seem to be directly related to the company itself. The tech-heavy Nasdaq Composite Index is now in correction territory, having fallen by more than 11% from recent highs. Many speculative and growth-dependent companies have fallen even further than the overall index. Nikola is one of them, even as its business is making headway. It recently shipped its first battery electric semi trucks to customers, and has made multiple announcements about deals with potential new customers.
Image source: Nikola.
Now what
Just since the start of 2022, Nikola has announced purchase agreements with three trucking and logistics companies for the potential sale of up to a total of 250 of its zero-emissions trucks -- both its battery electric vehicles (BEVs) and its hydrogen fuel cell electric vehicles (FCEVs). This week, Nikola also said it signed an agreement with a leasing and financing company to facilitate sales of its BEVs and FCEVs.
Another positive development was the approval by the California Air Resources Board for Nikola's Tre BEV to be eligible for a sales incentive of $120,000 per truck for California customers under the state's Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project. With an expanding list of potential customers and the reduced cost for California-based buyers, it would seem that Nikola's business is on track to grow. Nikola also recently announced an agreement with battery maker Proterra to supply heavy-duty battery systems for its trucks.
But the tech market hasn't been moving on specific company results recently. Investors' concerns about inflation and their expectations that interest rates will rise are driving the sector-wide sell-off, and Nikola has been swept along by that current. For those who believe in Nikola's technology and its vision for zero-emission class 8 semi trucks, the currently discounted stock price may represent a buying opportunity.
