Will Nikola Stock Recover in 2022?

The electrical truck maker’s stock fell 35% in 2021.

Rekha Khandelwal

Key Facets

  • Supply shortages would possibly perchance perchance perchance extend the commercial production of Nikola’s automobiles.
  • Excessive charges and lack of charging infrastructure are amongst the components in the encourage of the unhurried development in electrification of automobiles.
  • Nikola is aloof months away from producing electric automobiles for commercial sales.

On Dec. 17, Nikola (NASDAQ:NKLA) delivered its first Tre battery-electric pilot automobiles to Complete Transportation Services and products, a port trucking company in Southern California. That became as soon as potentially the principal principal clear pattern because the corporate became as soon as accused of false claims pertaining to to its skills, main to the departure of its founder Trevor Milton in September 2020.

So, extra than a year after the annoying traits, has Nikola after all moved on for the upper with its new management? Does the stock’s tumble latest a shopping replace? Let’s discuss that subsequent.

Nikola’s plans for 2022

First, let’s map discontinuance a more in-depth watch on the contemporary automobiles’ shipping. The automobiles that Nikola introduced to Complete Transportation Services and products are pilot automobiles. Complete Transportation Services and products will take a look at these automobiles, and if they’re learned enough, the corporate will repeat 30 battery electric automobiles in 2022. An repeat of 70 fuel cell automobiles would possibly perchance perchance perchance be conscious in 2023. As smartly as to winning trials, an repeat from Complete Transportation Services and products will count on it getting some authorities funding for the map discontinuance of automobiles.

Electric vehicle charging station with a truck.

Image offer: Getty Images.

Nikola will be in a position to commence producing automobiles on the market finest after ending modification of its manufacturing facilities and reaching clear validation and making an strive out milestones. Supply shortages, including of batteries and chips, would possibly perchance perchance perchance extend the commercial production of its automobiles.

Nikola got one other repeat in December from freight transport company Heniff Transportation, which agreed to favor 10 Tre BEV automobiles from Nikola. If these meet expectations, the corporate would possibly perchance perchance perchance favor 90 extra automobiles. The deliveries are expected to commence in the principal half of 2022. Nikola’s Tre BEV automobiles provide a differ of up to 350 miles. 

Total, if things shuffle as per map, Nikola will absorb a busy 2022. It would possibly perchance commence generating income from the sale of its automobiles all the device by the year.

What would possibly perchance perchance perchance now not work for Nikola

Governments and corporations absorb been having a watch on the heavy-responsibility truck segment as a key avenue to decrease emissions for a while. Despite foremost efforts, now not worthy development has been made to this point on this segment. There are just a few key components in the encourage of this unhurried development. First, in the wake of global chip and battery shortage, the electrification of gentle automobiles is getting prioritized over the heavy-responsibility segment.

2d, the charges of battery electric automobiles are high and are now not very dazzling for hasty owners upright now. Govt incentives are wanted for electric automobiles to make financial sense. Lack of charging infrastructure is one other screech, as electric automobiles need extra noteworthy chargers than traditional chargers for gentle automobiles.

Automakers are aloof transferring ahead with their electric truck plans, albeit slowly. So, Nikola faces intense opponents on this segment. Volvo got its first repeat for the VNR Electric truck in October. Daimler’s Freightliner electric automobiles absorb already surpassed one million miles in precise-world operation. The corporate expects to commence quantity production in 2022. Tesla delayed commence of its Semi truck to 2022, citing global provide chain challenges. The corporate is already getting tough orders for the Semi truck. Peterbilt and Navistar (NYSE:NAV) are amongst other top truck makers that absorb launched an electrical truck.

None of those corporations are producing electric automobiles at scale upright now, partly attributable to causes talked about above. However, because the demand for electric automobiles heats up, chip and battery shortage points procure resolved, production charges tumble, and incentives change into dazzling, all these gamers will pose stiff opponents to Nikola.

Notably, Nikola faces opponents in the fuel cell truck segment too. Hyundai‘s Xcient fuel cell automobiles absorb exceeded 1 million kilometers of utilizing. The corporate plans to deploy these in fleets in California in 2023. Navistar has collaborated with Customary Motors to offer fuel cells for its automobiles. Toyota is planning to make fuel cells for automobiles at its Kentucky plant. 

Is the fuel cell truck maker a favor?

Nikola is aloof months away from producing salable electric automobiles. Moreover, how its pilot automobiles will manufacture remains to be viewed.

Furthermore, with so many gamers coming into the electric truck market, Nikola now now not enjoys a predominant-mover income. The corporate’s automobiles produce now not appear to offer any explicit advantages over those offered by extra established names in the segment. With the extra or less monitor enlighten that Nikola has, it would possibly perchance perchance in all probability well also be extraordinarily spirited for it to develop potentialities. All in all, the risks that Nikola stock faces is now not going to be price taking. Traders would be avoiding this stock for now.

This text represents the realizing of the creator, who would possibly perchance perchance perchance disagree with the “reliable” recommendation set up of a Motley Fool top rate advisory provider. We’re motley! Questioning an investing thesis — even in point of fact apt one of our possess — helps us all mediate seriously about investing and make decisions that lend a hand us change into smarter, happier, and richer.

Rekha Khandelwal has no position in any of the stocks mentioned. The Motley Fool owns and recommends Tesla. The Motley Fool has a disclosure policy.”>

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