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Nikola soars on outlook despite founder’s resignation

Nikola shares jumped on Wednesday after the company reconfirmed its strategy following founder Trevor Milton’s resignation. Yahoo Finance’s Emily McCormick joins Kristin Myers to break down the details.

Video Transcript

KRISTIN MYERS: Well, Nikola is rebounding after the company reconfirmed its business strategy. For more on this, we have Yahoo Finance's Emily McCormick. Hey, Emily.

EMILY MCCORMICK: Hello, Kristin. We are seeing shares of Nikola rising about 17% now in intraday trading, really getting a boost here after the company came out with a press release today doubling down on its plans to hit key milestones despite the noise that we've been hearing the past month around the company with Hindenburg's short seller report earlier in September as well as the additional concerns now with Trevor Milton's departure from the company. Him, of course, being the founder, as well as multiple sexual assault allegations against him coming out in the past week.

Now, Nikola said in its statement today, quote, "Nikola continues to make progress on and remains committed to achieving the following milestones." Then included a chart of these milestones in that release. Some of these included completing the prototype for and testing the Nikola tray battery electric semi trucks by the end of this year, followed by production and customer availability starting in the fourth quarter of next year. Now, the company also said it's on track for its forthcoming Arizona facility to begin manufacturing starting in 2022.

Now, on its hydrogen fuel cell ambitions, the company still plans to announce a hydrogen station network partner by the end of this year and break ground on its first commercial hydrogen station by the second quarter of next year. Now, I do want to note in this press release today, Nikola did postpone its Nikola World Forum. That was originally expected to take place in December this year and be used as a platform to show off its electric pickup truck, the Nikola Badger.

Now, that was previously expected to be produced by General Motors starting in 2022, and as we know, discussions between General Motors and Nikola remain ongoing. That previously announced tie between the two companies expected to close by today. Actually seeing these talks extended because of some of the concerns now surrounding the company. But again, we are seeing markets participants upbeat on the stock given its announcement this morning, though shares trading up by 17%, Kristin.

KRISTIN MYERS: Emily, whenever we talk about Nikola, we always think about Tesla, so I'm wondering if you can talk to us a little bit about Tesla's competitor, Nio?

EMILY MCCORMICK: Absolutely, well, taking a look at Nio here, this stock getting a boost for a second day now, after Deutsche Bank analyst said in a note yesterday that customers are increasingly seeing the six-year-old electric vehicle company based in China as quote, "a high quality premium brand with best in class technology and service." Now, the analyst Edison Yu said he expects the company will post record deliveries and margins in the third and fourth quarters this year. Specifically. He expects to see 11,500 vehicles delivered in the third quarter. That report is expected to come out in October, and that would be at the high end of company guidance.

Now, Deutsche Bank also expects Nio will officially unveil in all electric sedan, the EE7, later this year. That's anticipated to include a hardware sensor suite that would enable level four autonomy by 2022. So that's a medium to long term catalyst here for this company as well. We are seeing shares of Nio up about 1% after rising more than 10% during yesterday's session, Kristin.

KRISTIN MYERS: All right, thanks so much, Emily.