Nikola is selling hydrogen trucks and stock is skyrocketing

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Nicholas

the stock was skyrocketing like in 2020. A sale of hydrogen trucks is the reason.

Manufacturer of electric trucks

Nicholas

(symbol: NKLA) announced that BayoTech, a producer of hydrogen gas, will purchase up to 50 Nikola hydrogen fuel cell electric vehicles for transporting hydrogen gas.

“Nikola and BayoTech are united by a common goal of providing reliable access to hydrogen across the United States,” Nikola CEO Michael Lohscheller said in a press release. “BayoTech’s low-carbon hydrogen fuel and transportation equipment will play an important role in supporting the adoption of Nikola’s [heavy-duty] zero-emission fuel cell electric trucks.

The demand for Nikola trucks and more hydrogen gas infrastructure to power them is good news. Investors seemed delighted. Shares rose 34% to $1.84. THE

S&P500
And

Nasdaq Compound
are up 0.6% and 1.2%, respectively.

The huge one-day gain could remind investors of the middle of 2020 when Nikola stock doubled on June 8, around the time it wrapped up its merger with a special-purpose acquisition company. The deal provided Nikola with $700 million in cash and essentially transformed Nikola into a publicly traded company.

Nikola stock closed that day at $73.27. That’s nowhere near $2 per share. Things have gotten much tougher for electric vehicle start-ups since then.

Higher interest rates and the need for more capital are the reasons for this. Wall Street estimates Nikola will use more than $1.1 billion to grow his business by the end of 2025. Nikola ended the first quarter with about $200 million on its books.

Write to Al Root at allen.root@dowjones.com