What happened
Nikola (NKLA 7.23%) made an announcement yesterday that might have had investors buzzing on any other trading day. But that wasn't the case today, with Nikola shares near Friday's lows closing in on the final trades of the day. As of 3:20 p.m. ET, Nikola stock was off 7.2%.
So what
Of course, the news of the day that triggered a market sell-off was the monthly inflation data. While some expected May data to show some goods and services to have reached peak inflation, the consumer price index (CPI) data instead showed inflation rose to the highest level in 40 years. That drove all stocks lower, but hit growth stocks that are priced based on potential future earnings especially hard.
Now what
Nikola falls squarely in the growth stock category, as it just recently began bringing in any meaningful revenue. But as the company begins to ramp up production of its battery electric heavy trucks, Nikola says it expects to achieve deliveries of between 300 and 500 vehicles this year. That would represent revenue of between $90 million and $150 million.
Yesterday, the company announced that those trucks were approved for the state of New York truck voucher incentive program as a zero-emission vehicle. That makes New York buyers eligible for an incentive valued at up to $185,000 per truck. That incentive would cover more than half the cost of the vehicle. To receive it, however, customers must also provide a qualifying pre-2009 vehicle to be scrapped.
That marks the second state incentive program approved for Nikola trucks, after California included the Nikola Tre battery electric truck for an incentive program worth $120,000 per truck for its California Air Resources Board (CARB) program.
Both are good news for Nikola and its investors. But Nikola may have a bumpier economic landscape to navigate as it ramps up production and tries to build a customer base. Today's inflation data stole the headlines, and that explains why shares of the start-up electric vehicle company are getting hit hard.
