What happened
Shares of electric truck maker Nikola (NKLA -2.44%) spiked higher Monday morning after the company announced another step forward for its hydrogen fuel-cell electric vehicle (FCEV). The stock had jumped 8% as of 10:30 a.m. ET.
So what
Nikola started selling its battery-electric heavy trucks last year, and expects to begin production of its hydrogen FCEV this year. Today, it announced it has a letter of intent for an order of 100 of its Tre FCEVs in Europe. Investors are boosting the stock on that news today, extending a 20% gain the shares have experienced so far in 2023. That comes after the stock lost over 80% last year.
Now what
Investors should note that the company didn't say it has a binding order for those vehicles. But it expects some of the first FCEV trucks produced by its European partner to be sold to Germany-based energy systems provider GP Joule.
Nikola plans to deliver 30 of its Tre FCEV trucks in 2024 and the balance of the order in 2025. GP Joule builds and operates renewable energy infrastructure including wind and solar farms as well as charging and fueling solutions.
Image source: Nikola.
While the stock has bounced off its lows this year, any real momentum will only come once these and other orders for Nikola's trucks are finalized and delivered. If progress is made on that front in 2023 and beyond, the stock should continue to rise. The company hasn't yet proved it can operate at scale, however, so only speculative investors should own the stock at this stage.
