Nikola Inks LOI With TTS To Supply 100 Trucks

·2 min read

Nikola (NKLA) has signed a Letter of Intent (LOI) with Total Transportation Services Inc (TTSI). The two are joining forces to accelerate the use of zero-emission trucks at the port of Los Angeles/Long Beach.

The collaboration will result in the trials of the Nikola Tre BEV as an alternative mode of transportation at the port. TTSI could end up acquiring 100 Nikola Class 8 battery-electric vehicles (BEV). The port trucking company has also shown intent in acquiring fuel cell electric vehicle (FCEV) semi-trucks.

While the letter of intent is for 100 zero-emission trucks, TTSI will begin with a four-truck pilot early next year.

Nikola’s Global Head of BEV business unit, Michael Erickson said, “TTSI’s decision to utilize both Nikola BEV and FCEV vehicles speaks to their forward-looking and strategic mindset in covering a variety of hauling distances and loads, while still contributing to California’s clean-air initiatives.”

“Our trucks operate for 18-20 hours a day making the benefits of the Nikola portfolio a perfect match for our needs. The expected availability of the BEV aligns with our desire to reach our sustainability goals quickly and the FCEV is ideal for longer-range applications,” said Vic LaRosa, TTSI’s president.

The LOI is a big deal for Nikola as it seeks to position the Nikola Tre FCEV truck to address the North American trucking market. The zero-emission trucks also bode well with California’s clean air initiative. (See Nikola stock analysis on TipRanks).

According to Deutsche Bank analyst Emmanuel Rosner, Nikola offers an ideal way of investing in zero-emission commercial trucks, with adoption poised to take off.

“In particular, its fuel-cell solution which bundles electric truck, hydrogen fuel, and full service and maintenance in one contract priced at lower cost of ownership than traditional trucks, could be attractive to fleet operators, and generate solid revenue for Nikola and attractive returns throughout the life of the vehicles,” said Mr. Rosner.

The analyst has reiterated a Hold rating on the stock with a $19 price target implying 87.38% upside potential to current levels.

Consensus among analysts on Wall Street is a Hold based on 1 Buy and 5 Hold ratings. The average analyst price target of $20.20 implies 99.21% upside potential to current levels.

Despite the bullish price targets, NKLA scores a 1 out of 10 on TipRanks’ Smart Score rating system, suggesting it is likely to underperform the overall market.

Related News:
Uber 1Q Results Top Estimates With Record Gross Bookings; Shares Fall
Ford Increases Investment In Solid-State Battery Startup, Solid Power
Jeff Bezos Sells $2.5B Amazon Shares As He Exits CEO Role

More recent articles from Smarter Analyst:

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting