Nikola (NKLA 9.93%) shares jumped as much as 4.5% Monday morning. As of 2:22 p.m. ET, the stock was still higher by 3.5%. The move came as the company is making important progress in its bid to build its hydrogen-fueled heavy trucks and associated fueling network.
Over the weekend, The Wall Street Journal reported on recent developments in the company's hydrogen truck program. That came after Nikola itself released news last week that it received approval from the California Air Resources Board (CARB) for eligibility of major incentives for potential hydrogen truck buyers.
The Journal report highlighted Nikola's ongoing efforts to build hydrogen production plants, fueling stations, and partnerships with other liquid hydrogen suppliers. The planned network will supply enough hydrogen to fuel 7,500 fuel cell electric vehicles (FCEVs) by 2026. Nikola will dedicate its own Tre FCEVs to hydrogen suppliers to deliver the fuel to hydrogen fuel stations, including the first three near Los Angeles that will support Southern California port operations.
The Tre FCEV will have a range of up to 500 miles, compared to about 300 miles for battery electric semi trucks. Last week's approval for CARB incentive eligibility gives potential customers another reason to acquire the trucks. Buyers can receive credits starting at $240,000 and up to $288,000 per truck in 2023. Nikola says customers will also be able to obtain a $40,000 clean commercial vehicle tax credit from the federal government from provisions in the Inflation Reduction Act.
Even as Nikola is making progress on its hydrogen vehicle and related infrastructure, investors remain skeptical. Nikola's shares are up about 16% year to date but remain near all-time lows at under $3 per share.
Nikola will have to show investors that it can gain customers and successfully operate a hydrogen network before more are convinced. But some looking to speculate on that success -- and the market for hydrogen-powered vehicles -- are buying into shares today.