What happened
After tumbling lower on Tuesday and Wednesday, shares of Nikola (NKLA 1.51%) are roaring back today. Investors are charged up about the manufacturer of battery-electric and hydrogen-electric vehicles thanks to a deal that the company announced this morning.
As of 12:09 p.m. ET, Nikola stock has risen 30.1%.
So what
Nikola and BayoTech, a developer of hydrogen production, storage, and transportation solutions, announced a strategic supply agreement today. Beginning in 2023, BayoTech will buy 50 fuel cell-electric Class 8 trucks from Nikola over the next five years with 12 of the trucks delivered by the end of 2024. The trucks have a range of 500 miles and can be used in a variety of applications including drayage and specialized hauling.
Additionally, BayoTech will deliver to Nikola hydrogen produced from facilities in Missouri and California in 2023 and 2024, respectively. Nikola will also purchase 10 BayoTech HyFill transport trailers, which will assist in the transport of hydrogen from production sites to refueling stations.
Speaking to the new collaboration, Michael Lohscheller, president and CEO of Nikola, said that "BayoTech's low-carbon hydrogen fuel and transport equipment will play an important part in supporting the adoption of Nikola's Class 8 fuel cell electric zero-emission trucks."
Now what
While news of the deal with BayoTech is encouraging news for Nikola, investors should remember that the company is far from out of the woods. There are concerns regarding Nikola's financial health, with its cash position narrowing from $233 million at the end of 2022 to $121 million at the end of Q1 2023.
Growth investors considering parking this EV stock in their portfolios may want to wait for the results of the annual shareholder meeting in early August as well as the company's Q2 2023 financial results report before choosing to pick up shares.
