Another day, another impressive gain by electric vehicle firm Nikola (NASDAQ:NKLA). Although investors are eagerly awaiting news on its pending partnerships, there appears to be no real catalyst on Tuesday. So, with that in mind, what is driving NKLA stock higher?
To start, investor enthusiasm for NKLA stock has been greatly rebounding in recent days. This comes after a major selloff, when short-selling firm Hindenburg Research launched accusations against the company. To start, Hindenburg said Nikola had made misleading claims and falsified progress with some of its electric trucks. Unsurprisingly, that leveled shares. But in recent days, a series of moves higher have taken Nikola back to the skies.
So what exactly is behind the rebound? Well, TV analyst Jim Cramer said fuel cell electric vehicles were a better bet than battery electric vehicles, which supports NKLA stock. Then, we learned that China was rushing to embrace FCEVs by 2030. In addition to that, the United Nations is hoping to cut down its reliance on coal in the coming years. All that bodes well for Nikola and its electric vehicle peers.
But importantly, a few more catalysts appear to be supporting the company on Tuesday. The first is that President Donald Trump is starting the presidential transition process. This means that all of the clean energy initiatives of President-elect Joe Biden look more like a reality. As part of this, Biden has promised to ramp up EV charging infrastructure across the U.S. That could boost consumer adoption of FCEVs and BEVs.
Additionally, Nikola is getting some love from Wall Street. A few days ago, Loop Capital analyst Jeff Kauffman initiated coverage on NKLA stock with a price target of $35. Any sort of institutional love on a hard-hit company like Nikola is a sweet treat.
NKLA Stock: What About General Motors?
There is also one more catalyst… and unsurprisingly, it involves General Motors (NYSE:GM). Prior to the Hindenburg Research report, the two companies were in talks to launch a partnership. As part of the deal, General Motors would help Nikola produce its Badger pickup truck. This would help Nikola get into market, as right now, all of its vehicles are still in development. Now, investors are left waiting for any updates on the deal.
However, even without confirmation of the deal, General Motors is still lending NKLA stock a hand. The legacy automaker recently made news after splitting with Trump. Now, the company supports California in its ambitious zero-emission targets. By 2035, the state wants all new vehicle sales to be electric. As General Motors dives into all things electric, it makes sense that it would realign itself politically.
Right now, that is giving U.S. electric vehicle companies a boost, especially while Chinese EV plays level out. Today, we have also seen moves higher in Tesla (NASDAQ:TSLA).
Keep an eye on NKLA stock. Who knows when we will get more news from General Motors, but at least for now, the FCEV play is trending higher.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.