Nikola, the first company to sell hydrogen-powered semis in the U.S., delivered more fuel cell trucks to customers in the year’s first three months than analysts expected and may benefit from tougher U.S. rules for cleaner heavy-duty commercial vehicles, positive developments as it works to shake off a chaotic past. And while its volumes are still small, Nikola is beating Tesla in the heavy truck market.
Its shares rose as much 11% on the news.
The Phoenix-based company said it delivered 40 Tre FCEV trucks in the quarter and built 43 at its Arizona factory. Deliveries of the big rigs, which retail for more than $500,000 each, rose from 35 in the final quarter of 2023. CEO Steve Girsky said the company has also begun shipping repaired battery-electric Tre trucks back to customers that were recalled last year for problems with their lithium-ion packs.
Aside from beating an expectation of just 33 deliveries to customers in the quarter, Baird equity analyst Ben Kallo said that Nikola’s business is looking stronger. The company has struggled for years after its disgraced founder Trevor Milton stepped down in 2020 after lying to investors about the company’s technology (he was convicted of securities fraud and sentenced to four years in prison and fined $1 million in 2023).
A new CFO and the opening of Nikola’s branded HYLA hydrogen fuel stations for trucks in California and Canada are also helping, Kallo said in a research note. Plus, the company is poised to benefit from tough new emissions rules for heavy-duty trucks announced by the Environmental Protection Agency last week.
“The standards apply to model years 2027-2032 and will require (truck manufacturers) to produce vehicles with increasingly carbon-neutral technologies,” Kallo said in a research note. “Impacted vehicles include delivery trucks, utility vehicles, transit buses, and semi-trucks. We view this as a twofold benefit for NKLA as it will both accelerate demand and indirectly benefit NKLA as charging/hydrogen fueling infrastructure is built out.”
Under CEO Steve Girsky, a former vice chairman for General Motors and long-time auto analyst, Nikola has tightened its business strategy to building battery and hydrogen trucks and setting up fuel stations to power them. Milton’s plans when he was still running the company— to also become a major producer of green hydrogen, build electric pickup trucks, military vehicles and watercraft — have all have been scrapped.
Nikola shares were up 7% to 95 cents in afternoon Nasdaq trading on Thursday. The stock has been below $1 for most of 2024 and shares are worth a fraction of the $65.90 peak in June 2020, before Milton’s downfall.
For now, the company is focused on getting trucks to customers in California, where a state program provides a $240,000 rebate to fleet customers who buy the Tre FCEV. Last month, Nikola opened a HYLA hydrogen station in Ontario, California, east of Los Angeles, that’s initially designed to refuel 40 trucks a day.
“We anticipate further sales growth in future quarters as our HYLA hydrogen fueling solutions come online,” Girksy said in a statement.
But to survive long term, the company also has to reduce quarterly losses and find sufficient funds to scale up the production of its trucks. It lost $966 million last year and reported $465 million in cash. The company didn’t announce when it would release first-quarter financial results.
Beating Tesla Semi
While its current sales volume is modest, delivering just 154 hydrogen and battery trucks since last year, Nikola appears to be far outselling Tesla in the electric truck market.
Elon Musk said in late 2022, when the Tesla Semi presumably went into production, that deliveries would ramp up throughout 2023 with a target of delivering 50,000 this year. However, the company hasn’t shared any delivery figures for it since then. The truck wasn’t referenced in first-quarter delivery figures released this week, and Tesla also didn’t include Semi figures in its quarterly financial filings last year. The model was listed as still being in “pilot production” in Tesla’s annual report filed early this year, with no details.
Notably, the Tesla Semi also isn’t registered among the trucks qualifying for California’s clean truck rebates — the nation’s most generous — suggesting it’s not being sold in the market where demand for electric commercial vehicles is highest. So far, the only known users of the Tesla Semi are Frito-Lay and Pepsi, which have about 100 trucks hauling chips and soda in California.
