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With Nikola (NKLA -9.62%) shares down more than 75% in 2022, investors in the company have gotten used to seeing weeks with double-digit percentage drops like this one. Since last Friday’s close, Nikola shares are down by 12% early on the final trading day of the week, according to data provided by S&P Global Market Intelligence.
Nikola didn’t release any major news this week. In fact, several items that came out over the past two weeks related to positive achievements for the electric heavy truck maker. But the tech-heavy Nasdaq Composite index continued to trail the broader market this week. And speculative growth stocks like Nikola continued to underperform even that index as investors sought more safety and income in this rising-interest-rate environment.
Nikola continues to work on getting traction for its business, however. In mid-December, it announced plans with green hydrogen producer Plug Power to increase hydrogen infrastructure that would benefit Nikola and its Tre fuel cell electric vehicle (FCEV).
Image source: Nikola.
This week, the company announced a partnership with European energy company E.ON that is intended to support the full supply chain needed for hydrogen mobility. The companies stated that their partnership had the “goal of making hydrogen fuel cell electric vehicles (FCEVs) cost competitive to diesel trucks, in terms of total cost of ownership.”
Also, California’s Air Resources Board (CARB) approved the Nikola Tre FCEV to apply for incentives under the state’s zero-emission vehicle program that could contribute up to $240,000 for the cost of each FCEV truck. Giving its customers access to those vouchers would grow the expected market for Nikola’s truck.
But an investment in Nikola remains a speculative long-term bet. This week, some investors may have decided that tax-loss selling would be a smart short-term move. That could mean that the stock will be due for a bounce in January. But any real returns for investors will depend on the adoption of Nikola’s trucks. Investors will find out how that progresses in the months and years ahead.
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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