Nikola (NASDAQ: NKLA) Surges Nearly 20 Percent on Securing an Order of 2,500 Electric Trucks From Republic Services
Nikola Corporation (NASDAQ:NKLA), the pre-revenue company championing battery-electric and hydrogen-powered trucks, experienced a pummeling over the recent weeks amid liquidation of securities held by the company’s PIPE investors. However, Nikola shares are surging today on securing an advanced order of 2,500 trucks.
As per Nikola’s press release, Republic Services has placed an advanced order for 2,500 battery-electric trucks that will be built on the Nikola Tre powertrain:
“[The company has received] a minimum order of 2,500 electrified refuse trucks from Republic Services, expandable up to 5,000. This order is to begin full production deliveries in 2023 with on-road testing likely to begin in early 2022. The refuse trucks are anticipated to carry up to an industry-leading 720kWh of energy storage.”
Nikola Founder and Executive Chairman, Trevor Milton, went on to note:
“The Nikola Tre powertrain is ideal for the refuse market as it shares and uses the same batteries, controls, inverters and e-axle. By sharing the Tre platform, we can drive the cost down for both programs by using the same parts. You couldn’t pick a better partner than Republic Services, a leader in long-term environmental sustainability and customer service. Republic Services will help us ensure the Nikola Tre meets customer and fleet lifecycle demands and we are excited to have them participate in the design process.”
Investors have reacted positively to this announcement. As an illustration, Nikola shares are currently up nearly 20 percent, trading at $43.73 price level, as of 09:37 a.m. EDT.
Of course, today’s development could not have come at a better time for Nikola in the light of fairly disappointing earnings announcement by the company last week. For Q2 2020, the company missed its EPS consensus estimate. We noted at the time that Nikola has not commenced formal commercial operations, thereby, rendering its top-line and bottom-line metrics inconsequential. However, a bigger disappointment for investors was the inability of the company to provide any major updates regarding the OEM partner for the Badger electric pickup truck as well as the quantum of reservation that the Badger has garnered to date.
Nonetheless, Nikola did provide the following encouraging business highlights during its Q2 2020 earnings:
- Signed a purchase order with Nel for electrolysis equipment capable of producing up to 40,000kg of H2 per day.
- Nikola Tre production test units are underway in Ulm, Germany and are scheduled to be complete in Q4 2020.
Moreover, Nikola broke ground on the 23rd of July in Coolidge, Arizona for the construction of a $600 million facility that will have a capacity to produce 35,000 trucks per annum. The first phase of the 1 million-square-foot manufacturing facility will be completed in Q4 2021, with phase 2 entering the consummation phase 12 to 18 months thereafter. Phase 3 will be completed in 2023. Upon completion of Nikola's greenfield manufacturing facility in Arizona, the Ulm facility will be utilized to manufacture and supply trucks to the European market. The company revealed during the earnings call that the FCEV version of its product offerings will only enter production in 2023.