FONTANA, Calif. - A Southern California dealership, GTS Group, has expanded its offerings by launching a new division named Next Generation Truck (NGT) to sell and service Nikola (NASDAQ:NKLA) Corporation's zero-emission Class 8 trucks. The NGT division will provide both battery-electric and hydrogen fuel cell electric trucks to its customers, along with assistance in securing various incentives.
GTS Group, traditionally known for diesel-powered Class 8 trucks, views the addition of Nikola's vehicles as a significant step towards sustainability in the trucking industry. Amir Delvarani, CEO of GTS Group, expressed enthusiasm for the venture, noting Nikola's advanced technology in zero-emission vehicles.
The expansion increases Nikola's sales and service locations to nineteen across the United States, as the company continues to grow its distribution network. Nikola President and CEO, Stephen Girsky, emphasized the importance of a comprehensive network for supporting customers' zero-emission transportation needs.
The partnership between GTS Group and Nikola aims to deliver not only clean and efficient trucks but also high-quality service and infrastructure solutions throughout Southern California. Delvarani assured that GTS and NGT would maintain their commitment to exceptional customer support nationwide.
Nikola Corporation, headquartered in Phoenix, Arizona, is focused on pioneering zero-emission solutions in commercial transportation with its Class 8 vehicles and the HYLA brand, which advances the hydrogen refueling ecosystem.
This expansion and partnership are part of the companies' efforts to contribute to a cleaner future in the trucking industry, and the information is based on a press release statement from Nikola Corporation.
In other recent news, Nikola Corporation's Q3 results showed a 22% increase in hydrogen truck deliveries, hitting its target with 88 units sold. The company's year-to-date total stands at 200 units. Nikola's founder, Trevor Milton, was ordered to pay $167.7 million due to misleading public statements about the company's operations. Additionally, Nikola welcomed Thomas "Tom" Schmitt as its new Chief Commercial Officer, leveraging his 35 years of experience in the transportation sector.
Despite these developments, DA Davidson recently revised Nikola's stock outlook, lowering the price target from $12 to $10, citing concerns about the company's financial trajectory. The firm pointed out a significant cash burn rate of $90 million in the second quarter. Despite these concerns, Nikola remains committed to expanding the hydrogen fuel infrastructure and improving its cash burn.
These are the latest developments for Nikola Corporation, a company that continues to advance its mission to transform over-the-road freight services and transportation through its Class 8 vehicles and energy solutions.
InvestingPro Insights
As Nikola Corporation (NKLA) expands its distribution network with the addition of GTS Group's new division, investors may be interested in the company's financial health and market performance. According to InvestingPro data, Nikola's market capitalization stands at $226.68 million, reflecting its position in the electric vehicle market.
Despite the positive news of network expansion, Nikola faces significant financial challenges. An InvestingPro Tip indicates that the company is "quickly burning through cash," which could be a concern for investors considering the capital-intensive nature of the EV industry. This is particularly relevant as Nikola aims to build out its sales and service locations across the United States.
Another InvestingPro Tip notes that Nikola "suffers from weak gross profit margins." This is evident in the company's financials, with a gross profit margin of -567.8% for the last twelve months as of Q2 2023. This metric underscores the challenges Nikola faces in achieving profitability as it scales its operations and expands its dealer network.
On a more positive note, Nikola's revenue growth shows promise, with a 103.87% increase in quarterly revenue as of Q2 2023. This aligns with the company's efforts to increase its market presence and could be bolstered by partnerships like the one with GTS Group.
For investors seeking a more comprehensive analysis, InvestingPro offers 19 additional tips for Nikola Corporation, providing a deeper understanding of the company's financial position and market outlook.
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