Nikola (NKLA 0.88%) stock tanked more than 10% this morning after it released its third-quarter update. It's not because the business isn't accomplishing its near-term goals. The company has begun to accelerate sales of its hydrogen fuel cell electric trucks.

But there were some specific items in the report that have investors selling Nikola stock today. It recovered some of the early losses, but shares were still lower by 7.1% as of 11:50 a.m. ET.

High costs and mounting losses

It's no secret that Nikola has been losing money. It has had to initiate multiple capital raising events in the last year. That's a big reason why the stock has dropped 85% so far in 2024.

Nikola reported a higher loss than expected in the latest quarter, too. The company reported an adjusted loss of $2.75 per share in Q3, which was worse than average estimates for a loss of $2.35, according to Reuters. Maybe more importantly in this part of its life cycle, revenue of $25.2 million missed estimates of $37.2 million.

And that is with the company selling a record 88 hydrogen fuel cell trucks to its wholesale partners and reaffirming plans for 300 to 350 units by year-end. The issue is likely the high costs involved to expand its hydrogen transportation infrastructure.

Nikola established its HYLA energy brand to support hydrogen fuel needs. The company said since starting to measure commercial fueling operations earlier this year, it has seen hydrogen dispensing volume grow by nearly 350%.

But it is having to push more resources in that area, too. The company stated, "We are focusing our strategy on providing more support at existing stations to better serve our customers as we scale."

There does seem to be a niche market for hydrogen fueled heavy trucks. The question for investors is whether Nikola will have the needed capital to expand its network enough to be able to reach positive cash flow.