Back to top

Image: Bigstock

Nikola (NKLA) Gets CARB Nod for Tre BEV, Partners Covenant

Read MoreHide Full Article

Nikola Corporation (NKLA - Free Report) recently announced that its Nikola Tre battery-electric vehicle (BEV) has been approved by the California Air Resources Board ("CARB") for the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) program.

The approval makes the vehicle purchasers eligible for an incentive worth $120,000 per truck. This will bring down the total cost of ownership for any purchaser operating in California.

HVIP was launched by CARB in 2009. It is the earliest model in the United States to score high on function, flexibility and effectiveness that go a long way to reduce the incremental cost of clean commercial vehicles. HVIP is administered by CALSTART, a national clean transportation nonprofit consortium, on behalf of CARB.

The Nikola Tre BEV, with a range of up to 350 miles, is expected to have the longest range among the current HVIP eligible Class 8 tractors.

Nikola is enthusiastic about the approval and looks forward to contributing toward reducing greenhouse gas emissions and lowering the total cost of ownership for Nikola’s California-based customers.

In another recent development, Nikola and Covenant Logistics Group, Inc. (CVLG - Free Report) , a premier total logistics provider based in Chattanooga, TN, entered into a collaboration. The deal will fuel Covenant’s sustainability objectives by adding 50 zero-emission vehicles to its fleet.

A Letter of Intent (LOI) has been inked for 10 Nikola Tre BEVs and 40 Nikola Tre fuel cell electric vehicles (FCEVs) upon the successful completion of a Nikola Tre BEV and Nikola Tre FCEV demonstration program. Nikola is expected to deliver the first Tre BEV truck and mobile charging trailer for testing to Covenant in the second quarter of 2022, with the Tre FCEV testing expected to follow in 2023.

The Tre BEV is ideally suited for short-haul, metro-regional application usage, while the Nikola Tre FCEV, with an anticipated range of up to 500 miles, is expected to add value to the company’s regional operation in highways, NKLA noted.

Covenant has a diverse portfolio of logistics and transportation solutions contributing to value-driven supply chains to procure products effectively and seamlessly. Adoption of BEV and FCEV technologies will be integral to Covenant’s long-term commitment to the de-carbonization of freight.

Zacks Rank & Key Picks

Currently, Nikola carries a Zacks Rank #3 (Hold).

Better-ranked players in the auto space include Ford Motors (F - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Genuine Parts (GPC - Free Report) , carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ford has an expected earnings growth rate of 2.2% for the current year. The Zacks Consensus Estimate for the current-year earnings has been revised around 2.7% upward over the past 60 days.

Ford’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. F pulled off a trailing four-quarter earnings surprise of 335.6%, on average. The stock has also rallied 156.2% over a year.

Genuine Parts has an expected earnings growth rate of 11% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.2% upward over the past 60 days.

Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of 16%, on average. Its shares have gained 35.2% over a year.