Embattled commercial vehicle manufacturer Nikola (NASDAQ:NKLA) continues to march forward with its difficult recovery process. It provided stakeholders with a substantive piece of good news, delivering 72 hydrogen fuel cell trucks, beating its own high-end guidance of 60 units. While NKLA stock remains a speculative investment, the underlying company’s shift away from battery-powered vehicles appears to be paying off.
According to the accompanying press release, Nikola wholesaled 112 of its hydrogen fuel cell trucks. Further, TipRanks noted that Nikola delivered 40 commercial (Class 8) trucks in the previous quarter. NKLA stock subsequently jumped on the positive demand implications.
Shares likely jumped on Tuesday due to the broader transition. Per TipRanks, Nikola suffered a difficult year in 2023 “when the company had to recall all its battery-powered vehicles, which was due to battery fires caused by coolant leakage.”
Additionally, NKLA stock — along with other players in the electric vehicle (EV) ecosystem — suffered from high interest rates. The rise in borrowing costs strained consumer budgets, leading to reduced sector demand. Even with today’s pop, NKLA lost about 66% of its market value since the start of this year.
NKLA Stock Attempts to Dig Itself Out of the Hole
While the zoomed-out chart doesn’t seem to bode well for NKLA stock, management isn’t taking matters lying down. In addition to the commercial truck deliveries, Nikola has generated momentum with a mix of new and returning customers.
Per the press release, Nikola inked a deal with Walmart (NYSE:WMT), specifically its Canadian division. According to a Reuters report, the vehicle manufacturer recently delivered a hydrogen-powered semi-truck to the big-box retailer. In addition, Nikola sold vehicles to 4GEN and IMC, which are repeat customers that purchased units through its dealer network.
To help with the transition to hydrogen, Nikola is busy opening refueling stations for its commercial trucks. However, the concerns impacting the pure-play EV sector may also challenge new-generation vehicles, including hydrogen fuel cell-powered iterations.
Interestingly, though, NKLA stock carries a consensus moderate buy rating among Wall Street analysts. Last month, Nikola announced a 1-for-30 reverse stock split to regain listing rule compliance.
On the date of publication, Josh Enomoto did not have (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.
On the date of publication, the responsible editor held a LONG position in NKLA.
