Nikola (NASDAQ: NKLA) shares soared in Thursday morning trading after the company’s CEO held a forum to address key business topics and engaged in a question and answer session. The stock of the electric heavy truck maker spiked higher by as much as 37% and remained up by 26.5% as of 11:25 a.m. ET.
The move reversed a month-long slide that has the stock down by more than 40% even after today’s jump.
Steve Girsky took over as Nikola’s CEO one month ago and has had to address issues ranging from a large recall of the company’s battery-electric trucks to questions related to its upcoming hydrogen-powered trucks and the infrastructure needed to grow that offering. Yesterday, Girsky — who was Nikola’s chairman of the board prior to being named CEO — offered comments and took questions to update investors.
Investors are likely reacting today to word that Nikola remains on track to begin delivering its hydrogen fuel cell trucks as soon as it completes final testing. In anticipation of positive results, the company has begun serial production of that version of its Class 8 semitruck. It plans to soon begin customer deliveries. The company has previously said it has orders for more than 200 hydrogen fuel cell trucks.
The topic of the battery-electric truck recall has had investors spooked since the company announced it has had “several thermal incidents” since June. Preliminary findings indicated a coolant leak inside one of the battery packs caused the truck fires.
While the company is not yet able to quantify how much the recall and repairs will cost, Girsky was able to convey the company’s specific plan to remedy the problem. That includes replacing coolant lines that connect to the battery packs.
Investors seem to be shrugging off that short-term hit, though, as Girsky announced that the first hydrogen fuel cell trucks came off the company’s Arizona production line about two weeks ago. He added that the company has now received non-binding orders for over 210 of those trucks. He also noted that the hydrogen-powered truck “uses a different battery pack from a different supplier” versus the recalled battery-electric trucks, which likely helped soothe investors.
The production line has the ability to produce both versions and has the capacity for 2,400 trucks per year. The positive news related to its hydrogen trucks has investors piling into the beaten-down stock today. It could have more room to run once those hydrogen trucks are in use by customers, too.
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Howard Smith has positions in Nikola. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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