Nikola shares jump as it starts manufacturing electric trucks (updated)

Proterra

24/03/2022 14:08

(Adds background, analyst comments, updates shares)
    March 24 (Reuters) - Nikola Corp  NKLA.O  shares rose about 15% on Thursday,
as Wall Street cheered the company starting production of its electric truck on
schedule.     
   The electric-vehicle maker said at its analyst day on Wednesday it had
started manufacturing Tre battery electric vehicle (BEV) at its Coolidge,
Arizona facility on March 21 and would deliver 300 to 500 semi-trucks this year.
 urn:newsml:reuters.com:*:nL3N2VQ41H    
    The Phoenix, Arizona-based company expects to start production of the Tre
BEV truck at its factory in Germany in June 2023.
    Several electric vehicle makers including legacy automakers such as Ford
Motor Co  F.N  and General Motors  GM.N  that have entered the segment aim to
deliver their first EVs this year as demand heats up, but higher raw material
prices and supply chain woes have clouded their timelines.
    The Nikola story has increased credibility now as trucks start to roll off
the line, said Jeffrey Kauffman, analyst at Vertical Research Partners, adding
the company could surprise with new customer orders.    
    Nikola expects positive gross margins for its Tre BEV by 2023, which could
grow to about 20% after 2025, while in 2022 it expects a negative gross margin
of 60% to 75%.
    "We got the sense that NKLA has learned a few lessons from other EV
companies looking to ramp-up production ... Nikola is in touch with suppliers on
a daily basis and is continuously discussing and locking-in pricing as volumes
rise," DA Davidson analyst Michael Shlisky said.
    Traders have a short position on about 27.5% of Nikola's free float,
according to estimates from data analytics firm Ortex.
    Nikola shares were trading at $10.52. As of Wednesday, the stock had lost at
least 35% of its value since the company's founder was charged with defrauding
investors in July last year. 

 (Reporting by Akash Sriram in Bengaluru; Additional reporting by Medha Singh;
editing by Vinay Dwivedi)
 ((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;))