Nikola (NKLA 7.23%) announced some news that has its stock popping today. As of 12:40 p.m. ET, the stock of the electric heavy truck maker was near the day's highs, up by 13.1%.
While that's good news for shareholders, the stock is still sitting below $1 per share after dropping more than 40% over the last three months. But today's news is what might help this company rebound.
Hydrogen truck sales are happening
Even after that huge drop, Nikola has a market cap of more than $860 million. While that may sound like a lot for a money-losing company, it's down from nearly $12 billion at its peak three years ago. The excitement that led to that lofty stock price, and what has kept the company close to a $1 billion valuation, is the potential it has to lead a change for a portion of the heavy trucking industry.
Nikola has pivoted somewhat from battery electric trucks to hydrogen-fueled electric trucks. It always intended to manufacture both versions, but it is now focusing on the potential market for hydrogen fuel cell electric vehicles (FCEVs).
That's why today's news that the company has sold its first 35 to dealers has the stock moving higher. Nikola has produced 42 FCEVs to date, with the balance being field tested with a fleet partner, being used for customer training purposes, or still in the validation phase.
A bigger bet on hydrogen
That means Nikola is still a risky bet on hydrogen-fueled transportation. The FCEV trucks have a range up to 500 miles and an estimated potential fueling time as low as 20 minutes. Fueling will heavily depend on infrastructure, though. That infrastructure includes hydrogen production, transport, fueling stations, and mobile fuelers.
Investors could be rewarded if all of that falls into place, and the trucking industry embraces the technology. That still remains to be seen, but Nikola announced a good start today. That has the shares jumping by double digits.
