Why Nikola Stock Is Moving Higher Today

The company introduced a dinky uncover, but there is honest a cramped more occurring here.

What came about

Shares of electrical heavy-truck beginning-up Nikola (NASDAQ:NKLA) were Trading greater on Tuesday, after the corporate introduced that Covenant Logistics Neighborhood (NASDAQ:CVLG) has signed a letter of intent to raise 50 of Nikola’s electrical semi trucks, if a take a look at program goes well.

As of 11: 15 a.m. ET at the original time, Nikola’s shares were up about 5.1% from Monday’s closing stamp.

So what

Nikola acknowledged that Covenant Logistics, a lengthy-haul trucking firm basically basically basically based in Chattanooga, Tennessee, has agreed to raise 10 battery-electrical (BEV) Tre semis, and 40 gas-cell-powered (FCEV) Tres, as soon as an illustration program has been executed to each and each corporations’ pleasure.

A Nikola Tre semi with a trailer, in Covenant Logistics livery.

Covenant Logistics has signaled its intent to raise 50 Nikola Tre electrical semis, as soon as an illustration program has been executed successfully. Image source: Nikola.

Nikola acknowledged that this is able to well well voice a BEV Tre and a mobile charging trailer to Covenant for testing in the 2nd quarter. A FCEV Tre will practice subsequent 300 and sixty five days, as soon as production of the hydrogen-powered variants begins. 

That’s an excellent bit of recordsdata for Nikola, and it’s likely why the stock is intriguing up at the original time.  

Nikola is positioning the BEV Tre as a rapid-haul truck for metro and regional routes, as limiting the truck’s differ permits it to care for battery weight and recharging cases reasonably low. The FCEV Tre will dangle a differ of up to 500 miles, Nikola has acknowledged, making it apt for lengthy-haul freight routes.

Now what

The Covenant deal itself just isn’t a mighty one. I feel the top likely plot to focus on it is that a basic trucking-mercurial operator is kicking Nikola’s tires, testing each and each the corporate and its products to scrutinize if there is an extended-time duration fit for Covenant’s mercurial. 

What makes it interesting for Nikola investors is this: It be the fourth tire-kicking deal that Nikola has introduced with main mercurial operators since it made its first deliveries on Dec. 17. 

The company’s shares dangle had a brutal trip since its founder used to be ousted amid scandal in 2020. Nonetheless I feel it is time for electrical-car investors to buy a 2nd scrutinize at Nikola. It be changing into obvious that there is substantial substitute hobby in the Nikola Tre, and that undoubtedly seems to be bullish. 

This article represents the belief of the creator, who might perhaps well well disagree with the “legit” recommendation scheme of a Motley Fool top class advisory service. We’re motley! Questioning an investing thesis — even one in every of our dangle — helps us all think severely about investing and assemble choices that encourage us become smarter, happier, and richer.

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.”>

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