What happened
The past month has been good for electric vehicle (EV) stocks and the gains only accelerated this week. Battery electric and hydrogen-powered heavy truck maker Nikola (NKLA +0.00%) led the way with a 28% jump. Shares of fellow hydrogen fuel cell truck maker Hyzon Motors (HYZN +0.00%) and electric car maker Fisker (FSR +0.00%) also jumped about 12% and 8%, respectively, heading into the final day of this week's trading, according to data provided by S&P Global Market Intelligence.
OTC: NKLA
Key Data Points
So what
It's not surprising to see Nikola shares move higher on the heels of potential new legislation that is intended to support and fund climate change initiatives. That bill hasn't passed yet, but the fact that pivotal senator Joe Manchin is backing it brought life back to the movement. On top of that potential tailwind, Nikola reported second-quarter earnings this week and beat expectations. Hyzon shares are also rising on the tails of both of those items. For its part, Fisker also reported its quarterly update this week, and backed its previous guidance for the start of production of its electric Ocean SUV.
Image source: Fisker.
Now what
Nikola had a busy week in addition to its earnings release. The company announced it will acquire Romeo Power to bring its battery pack supplies in-house. And it importantly received shareholder approval to enable an increase in its share count from 600 million to 800 million to assist with future additional capital needs.
Nikola produced 50 battery electric trucks in the second quarter, delivering 48 of them. That brought in revenue of just over $18 million. The company continues to project it will deliver between 300 and 500 trucks in 2022 as it ramps up production and improves efficiencies.
Fisker similarly reaffirmed its projections for 2022. The EV start-up still expects production of its Ocean SUV to begin in November. The company said it has 56,000 reservations for the vehicle, including 5,000 preorders that required $5,000 down payments. Fisker also predicted it would spend as much as $790 million in operating expenses and capital expenditures this year; it held $852 million in cash as of June 30.
All of these companies remain speculative investments, but are on track with plans for commercialization. As an example of the investment risks, however, one need look no further than Hyzon's recent announcement that it will delay its second-quarter financial filing due to "revenue recognition timing issues in China." It also said it has identified operational inefficiencies at its European joint venture.
While new legislation supporting the clean energy sector would be a tailwind for these companies, investors still need to research what is going on under the hood of any EV investment.
