Nikola (NKLA +0.00%) stock has rebounded dramatically in recent weeks after a muted start to the year. The electric vehicle (EV) stock gained 39.8% value in March alone, according to data provided by S&P Global Market Intelligence.
After recalling its battery-electric vehicles (BEVs) last year, Nikola is now focusing on hydrogen fuel cell heavy trucks and has already started producing and delivering them, giving investors a reason to buy the languishing stock.
Nikola is getting things back on track
Nikola stock made the biggest move last month in the latter half. That's also when the EV maker celebrated the opening of its first-ever hydrogen refueling station, in Southern California. The Hyla-brand station in Ontario will be able to fuel up to 40 Nikola hydrogen fuel-cell electric Class 8 trucks daily. In March, Nikola also unveiled Alberta's first commercial refueling station in collaboration with several partners
Nikola is targeting up to nine new refueling stations by mid-2024 and expects 14 refueling stations to be operational by the end of the year. With more Hyla hydrogen fueling stations coming online, Nikola also expects sales of its trucks to rise further in the coming quarters.
Nikola started deliveries of its hydrogen fuel-cell trucks in the fourth quarter, and it delivered all 35 trucks it had in its inventory in Q4. Earlier this month, the company said it had produced 43 hydrogen fuel-cell Class 8 semitrucks and delivered 40 of them to its wholesalers in the first quarter, with the remaining three scheduled for delivery in early April.
Nikola aims to ramp up production and sales of hydrogen trucks now that it has shifted focus away from BEVs. Nikola voluntarily recalled 209 BEVs in August last year on account of faulty battery packs and said it would replace them. The company has now started returning its reworked BEVs with new battery packs to customers. That means the vehicle recall and the costs associated with it, which were an overhang on the EV stock, are in the past. That's also a reason why investors are bidding the stock higher.
Can Nikola stock rally even higher?
With Nikola's fuel-cell truck hitting the roads and the company expanding its fueling infrastructure at the same time to align with deliveries, interest in the beleaguered EV stock has unsurprisingly picked up. Investors, however, will now expect Nikola's revenue to grow steadily and losses to narrow, but it may be too early to expect much as the EV industry is facing a slowdown and Nikola has only just started producing hydrogen fuel-cell trucks. Also, the company continues to burn cash rapidly and has consistently issued stock to raise funds, and that's something investors don't want to see anymore. Nikola stock, therefore, will need some solid catalysts to maintain its momentum after its recent rally. Its first-quarter numbers won't be out until May 7.
