Nikola Corporation (NKLA) a zero-emissions truck manufacturing company announced the signing of a Letter of Intent (LOI) with Saia LTL Freight (Saia) for the purchase or lease of 100 zero-emission trucks, which is dependent on the successful demonstration program.
Following the news, NKLA shares soared up to 9.3% and ended the day up 3.3% at $10.21 on January 6. Nikola listed on June 4, 2020, through a merger with a special purpose acquisition company (SPAC) and its shares have lost 42.5% over the past year.
LOI with Saia
Saia is a leader in the less than truckload (LTL) logistics company, and is committed to reducing the environmental emissions from trucking. Through the LOI, Saia intends to buy or lease 100 Nikola Tre heavy-duty battery electric vehicles (BEVs) to bolster the usage of heavy-duty electric trucks.
Under the LOI, in the first half of 2022, three Nikola BEV trucks will operate in different locations across the Saia network. Upon satisfactory performance of these trucks, Saia will go ahead with its purchase or lease deal.
Out of the 100 trucks, the first 25 trucks are expected to be delivered in 2022, and the rest over a period between 2022-2024 in a phased manner.
Nikola President for Energy and Commercial, Pablo Koziner, said, “This announcement represents another milestone in our continuous progress towards the delivery of zero-emissions vehicles, energy solutions, and the sales and service network required to support our valued customers.”
Saia President and CEO, Fritz Holzgrefe, said, “We are excited to partner with Nikola Corporation as we work to integrate battery-electric trucks into our tractor fleet… We are deeply committed to conducting our business operations in a responsible and sustainable manner, reducing our impact on the environment while still providing our customers with exceptional service.”
With 4 unanimous Holds, the NKLA stock has a Hold consensus rating. The average Nikola price target of $13.67 implies 33.9% upside potential to current levels.
TipRanks data shows that financial blogger opinions are 42% Neutral on NKLA, compared to a sector average of 73%.
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