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Nikola (NASDAQ:NKLA) stock is in the green by more than 50% today after the zero-emissions truck maker announced a new deal with a hydrogen production and transportation company, BayoTech.
Per the deal, BayoTech has agreed to purchase up to 50 Nikola Class 8 fuel cell electric vehicles (EVs) over the next five years. The first twelve trucks are set to be delivered in 2023 and 2024. Nikola, on the other hand, agreed to purchase low-carbon hydrogen from BayoTech’s Missouri and California production sites and up to 10 BayoTech HyFill transports for hydrogen delivery to refueling stations.
“Nikola and BayoTech are united by a common goal of providing reliable access to hydrogen throughout the United States,” said Michael Lohscheller, president and chief executive of Nikola. “BayoTech’s low-carbon hydrogen fuel and transport equipment will play an important part in supporting the adoption of Nikola’s Class 8 fuel cell electric zero-emission trucks.”
Meanwhile, Mo Vargas, president and CEO of Bayotech, expressed a similarly optimistic sentiment on the deal:
“We’re immensely proud to be an industry leader in our commitment to deliver hydrogen to local customers via zero-emission fuel cell trucks… Partnering with forward-looking companies like Nikola allows us to accelerate the deployment of our hydrogen hub network and stimulate the growth of the hydrogen ecosystem.”
NKLA Stock Soars on BayoTech Deal
Today’s BayoTech/Nikola deal seems like a masterclass in synergy. The mutual nature of the agreement has clearly encouraged investors That Nikola may well deliver on its myriad promises. For Nikola, the agreement is further validation that the company’s return to prominence is indeed coming along.
If you recall, Nikola has struggled to maintain investor sentiment following the conviction of Nikola’s founder and former CEO, Trevor Milton. Milton was found guilty of lying to investors about the production state of its emission-less trucks, earning millions in fraudulent investments in the process.
As a result, some investors have questioned if the once-promising EV maker would ever come to market with the same vigor it once possessed. While the company isn’t quite out of the woods yet, its recent moves have put some investors on alert that Nikola may yet prove to be more than the latest Lordstown Motors (OTCMKTS:RIDEQ) look-alike.
NKLA stock is up more than 100% over just the past month, in part due to its shrewd-deal makings. Interestingly, NKLA experienced another major surge in share price in June after investors failed to pass Proposal 2, which would’ve allowed the company to issue additional shares as a fund-raising measure while diluting existing shareholders’ ownership, a proposal Milton publicly disagreed with.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.