Published -July 14th, 2023 @ 2:30 PM (GMT+2)
Groundbreaking Deals Fuel Nikola's Surge
Shares of electric truck manufacturer, Nikola Corporation (NASDAQ:NKLA), bounced back from a turbulent week, witnessing a dramatic rise of 30.1% by mid-day, and a staggering 61% by the end of the day on Friday July 14, 2023. This was mainly due to two pivotal agreements inked with BayoTech and Bosch, fuelling investors' renewed optimism in Nikola.
BayoTech, a developer of hydrogen production, storage, and transportation solutions, signed a strategic supply agreement with Nikola. This deal would see BayoTech purchase 50 Class 8 fuel cell-electric trucks over the next five years, starting in 2023, with a range of 500 miles.
In return, BayoTech will supply Nikola with hydrogen produced from its Missouri and California facilities in 2023 and 2024. Nikola will also acquire 10 BayoTech HyFill transport trailers, facilitating the transport of hydrogen from production sites to refuelling stations.
Meanwhile, Bosch, a significant Nikola supplier, announced at its Tech Day 2023, that it would commence volume production of its fuel-cell power modules, with Nikola serving as the pilot customer. Bosch's fuel cells are to be utilized in Nikola’s Class 8 truck, set for initial deliveries in North America in Q3, 2023.
Financial Concerns Remain Amid Optimism
However, despite the promising deals, Nikola’s financial health remains a concern for potential investors, with its cash position dwindling from $233 million at the end of 2022 to $121 million at the end of Q1 2023. Investors should consider awaiting Nikola's Q2 2023 financial results and the results of the annual shareholder meeting in August before investing. Despite the volatility seen in the stock value in the past, the company now appears to be on a firmer footing, planning for the future.
Conclusion
While Nikola's share price surge indicates renewed investor faith, financial concerns remain. These upcoming deals have potential to bolster Nikola's position in the hydrogen fuel-cell truck market.
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