Nikola soars 22% after securing order for 2,500 electric garbage trucks
- Nikola Motors leaped as much as 22% on Monday after finalizing an order for at least 2,500 electric garbage trucks.
- The company announced Monday it will develop and produce electric vehicles for trash collection firm Republic Services over the next three years. The deal could expand to 5,000, according to the statement.
- The deal completes Nikola's goal to secure a major order before the end of 2020.
- The company still plans to find an automaker with which to produce its Badger pickup truck and a partner for developing a hydrogen fueling station network, according to The Wall Street Journal.
- Watch Nikola trade live here.
Nikola Motors surged as much as 22% on Monday after securing an order for at least 2,500 electric garbage trucks and, in turn, completing one of its three 2020 goals.
Nikola announced Monday it will work with trash collection firm Republic Services to develop and produce the vehicles to create the industry's first large-scale fleet electrification. The trucks will begin joining Republic's fleet in 2023 after testing through 2022. The deal could expand to 5,000 vehicles, according to the statement.
The use of electric vehicles should create "significant operating cost savings and environmental benefits," Jon Vander Ark, president of Republic, said. Nikola CEO Mark Russell called the deal "a game changer."
The Wall Street Journal first reported on the order.
The deal completes one of Nikola's goals for the year. Founder Trevor Milton previously said the truck manufacturer planned to secure a major order before the end of 2020.
Milton told The Journal that Nikola still aims to find an automaker with which to produce its Badger electric pickup truck. The company also seeks a partner for creating a network of hydrogen fuel stations.
The Republic deal marks Nikola's first large-scale order since selling as many as 800 hydrogen-electric trucks to Anheuser-Busch in 2018. Hype around the company has since skyrocketed on hopes that it can compete with Tesla's upcoming Semi truck. Nikola shares have rallied more than 21% after the firm began trading publicly on June 4.
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Still, some are waiting for more concrete evidence of the firm's potential before piling in. Analysts pressed Nikola in its August 4 earnings call for details on new orders but received little in return. JPMorgan analyst Paul Coster asked executives "is this all we get?" during the call's question-and-answer portion before requesting information on Nikola's product timeline and order hopes.
Russell told analysts they had to trust "there's a lot more going on than what you see in the announcements," and that orders would be revealed "when we are able to announce those publicly."
Nikola traded at $41.76 as of 10:10 a.m. ET Monday.
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