NKLA - Nikola Moves Ahead But These 3 Investor Risks Remain
With the passenger vehicle market moving rapidly toward electrification, companies' next focus is the heavy-duty segment. The need to decarbonize this segment of transport is clear. According to the International Council on Clean Transportation, heavy-duty trucks represent less than a tenth of all vehicles, but account for roughly 40% of the carbon emissions.
With its battery and hydrogen electric trucks, Nikola (NASDAQ: NKLA) hopes to decarbonize the heavy-duty transport segment. Let's discuss what may or may not work for Nikola, and what it means for its stock.
Nikola's initial products include a battery electric truck, the Tre BEV, and a hydrogen fuel cell electric truck, the Tre FCEV. Additionally, the company believes that its key differentiator is its planned hydrogen fueling ecosystem including hydrogen production, procurement, and distribution. Nikola plans to offer a so-called "bundled lease model" which would include the cost of the truck, hydrogen fuel, and maintenance. This could be a smart strategy, considering that interest in fuel cell trucks could be rock-bottom in the absence of fueling infrastructure.
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Nikola Moves Ahead, But These 3 Investor Risks Remain