Nikola shares fell 3% to $52.96 Thursday on the note.
"Nikola offers investors a rare pure way to invest in zero-emission commercial trucks, whose adoption is poised to take off driven by global regulations," Deutsche Bank analyst Emmanuel Rosner wrote.
However, Rosner still placed his price target below the Phoenix-based company's previous closing price.
The firm estimates that Nikola could sell 15,000 zero-emission semi-trucks in 2025, with that number growing to 50,000 by 2030, generating $18.2 billion in revenue by that time.
Nikola is scheduled to have its first vehicle hit the market in mid-2021, with a second model debuting in 2023.
"In particular, its fuel-cell solution which bundles electric truck, hydrogen fuel, and full service and maintenance in one contract priced at lower cost of ownership than traditional trucks, could be attractive to fleet operators, and generate solid revenue for Nikola and attractive returns throughout the life of the vehicles," Rosner said.
Rosner estimates the size of the North American Class 8 commercial vehicle market to be $130 billion, with the European market currently sitting at $150 billion.
Last week the company was upgraded to overweight from neutral at JPMorgan by analysts who affirmed the company's $45 price target after a 40% seven-day decline in July.
"NKLA is currently a story stock, but we are on board as long as the company executes to plan, and providing the stock offers a favorable risk-reward tradeoff," JPMorgan analyst Paul Coster said.