It looks like Nikola (NASDAQ:NKLA) and its shareholders just received some good news. Reportedly, Nikola has announced a letter of intent (LOI) for an order of 100 electric vehicles (EVs) from GP Joule. This indicates that Nikola may be gaining traction as the EV maker builds its market presence in Europe. Financial traders are clearly bullish on this development, with NKLA stock rallying quickly this morning.
Here’s the scoop. GP Joule is based in Germany and provides integrated energy solutions. The company’s LOI specifies a purchase order of 100 Class 8, heavy-duty Nikola Tre hydrogen Fuel Cell Electric Vehicles (FCEVs).
To fulfill this order, Nikola intends to produce 100 Nikola Tre FCEVs in the European 6×2 variant. The automaker will have some assistance in this endeavor, however. In a joint venture, Nikola and Iveco Group (OTCMKTS:IVCGF) will manufacture the 100 FCEVs at a production site in Ulm, Germany.
This won’t happen overnight, of course. According to the press release, 30 of the Nikola Tre FCEVs will be delivered to GP Joule in 2024. The other 70 vehicles are set to be delivered in 2025.
What’s Happening With NKLA Stock?
Is a 100-vehicle purchase order a big deal? NKLA stock traders seem to think so today, as they bid the Nikola share price up more than 5% this morning.
Perhaps traders should read the fine print, however. The purchase order isn’t a done deal yet. According to the press release, the order is subject to GP Joule’s “successful application for KsNI funding, Germany’s program to support the acquisition of vehicles with alternative, climate-friendly drives.”
Still, all parties appear to be confident today, including NKLA shareholders. Perhaps they’re feeling optimistic that Nikola can extend its foothold in the European EV market.
Nikola President and CEO Michael Lohscheller is certainly pleased with the development. The CEO considers the purchase order to be “an example of how the Nikola Tre FCEV can further support commercial customers in Germany in their transition towards zero-emissions several years ahead of other” original equipment manufacturers (OEMs).
It’s unknown whether today’s rally in NKLA stock will persist over the coming days. Still, Nikola investors can at least say the company is off to an auspicious start in 2023.
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On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.