The Nikola Corporation (NASDAQ: NKLA) once touted as the ‘Tesla of trucking’ has had an extremely bumpy ride since first going public in 2020.
Buoyed by great expectations, NKLA stock prices reached as high as $1,977 by mid-2020, before unceremoniously crashing to $450 by the end of 2020.
The primary driver behind this drop was a report from activist short-selling group Hindenburg Research, which alleged fraud regarding the company’s technical capabilities, along with levying an accusation that a key product demonstration was staged.
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This was further compounded by founder and then-CEO Trevor Milton’s exit, undue optimism on NKLA’s part regarding the current state of its tech, as well as consistent misses in terms of the production and delivery of vehicles.
As legal woes continued to be a financial drain, the truckmaker experienced immense issues with truck quality — culminating in all 209 NKLA electric trucks being recalled due to fire risks associated with their batteries.
In the midst of all these troubles, Nikola shifted its focus more toward an alternative clean transportation solution — hydrogen. It would be premature to say the company is out of the woods — but that shift has just shown promising signs of recovery.
Nikola reports record hydrogen-powered truck sales
In an October 2 press release, NKLA reported that 88 Class 8 hydrogen fuel cell trucks were sold to dealers and end customers, marking a 22% increase quarter-over-quarter.
This was in line with previously stated internal expectations that posited 80 to 100 units would be sold in the quarter. At the time of writing, a total of 235 units have been sold since their introduction in Q4 2023.
The news was followed by an immediate increase in Nikola stock price, which surged by 19.57% in a single day, adding $0.91 to the NKLA share price
Record deliveries proved to be the final piece needed for an inflection point in investor sentiment — at least for the time being.
The clean energy truck maker also recently announced an apparent end to its longstanding legal woes — with founder and CEO Trevor Milton, convicted of fraud in 2022 and the company reaching a $165 million settlement.
Recent press releases have also indicated a positive outlook when it comes to solving its electric-vehicle recall issues, as well as hopes that the trucks could be returned to customers by the end of 2024.
NKLA still has a long way to go
While investor sentiment has shifted, it’s important to note that long-term outlooks for the business are still shaky at best. While the pivot toward hydrogen fuel cell vehicles seems to be paying off, at least in the short term, the technology is still quite unproven compared to traditional EVs, particularly at scale.
The current lack of hydrogen infrastructure and the expense of creating it could prove insurmountable— while the company is addressing some of these issues by seeking to emulate Tesla’s supercharger network through its HYLA brand, Nikola has far less funding at its disposal.
Finally, the efficiency of hydrogen fuel cell vehicles is still the subject of widespread skepticism, particularly when compared to more common battery-electric solutions, which have both more data and a proven track record at their disposal.
Still, it remains to be seen how the situation will develop in the long run — green trucking is a niche that carries high potential, and if hydrogen adoption does turn out to make economic sense, NKLA could see significant first-mover advantages in the space — provided that the company’s significant cash burn issues don’t prove to be too dire in the meantime.
