(This story is for CNBC PRO subscribers only.) Nikola's announcement that it will provide at least 2,500 all-electric refuse trucks for Republic Services is "providing early elements of validation" for the newly public electric vehicle maker, Deutsche Bank said Tuesday. In a note to clients the firm re-iterated its short-term catalyst call buy rating on shares, saying the company is likely to announce additional key milestones and partnerships over the coming months. "This is the first binding commercial contract disclosed for Nikola's BEV trucks, and we view this commitment by a large established fleet operator as providing early elements of validation for Nikola's solutions," the firm's analysts led by Emmanuel Rosner said. "We expect the company to deliver the remaining critical business milestones over the next few months: an OEM manufacturing partner for its Badger pickup, and commercial collaboration partners for its hydrogen stations," he added. Shares of Nikola surged 22% on Monday after the deal was announced. The order includes 2,500 electrified chassis, with the option to increase it up to 5,000 units, according to a release. The company expects manufacturing and testing of the trucks to begin in early 2022, followed by deliveries in 2023. "There are various pros and cons to EV trucks for waste collection, but it is becoming increasingly more likely that these vehicles will be the norm for residential and commercial collection, especially as some municipalities have already established fleet electrification mandates," Rosner said. Nikola founder and Executive Chairman Trevor Milton said in a tweet that the binding truck order was worth $1 billion to $2 billion. The company went public on June 4 through a reverse merger with special purpose acquisition company VectoIQ , and has garnered investor enthusiasm as the broader electric vehicle space heats up. A few days after going public the stock hit a record high of $93.99, but has since retreated from that level, with shares closing at $44.81 on Tuesday. For one, investors note that the company is still relatively new and bringing an electric vehicle to market is difficult. And while Deutsche Bank has a buy rating on the stock now, over the longer-term it's neutral "pending customer and partner validation, and early company traction with executing the business plan." The firm has a $50 target on the stock. Nikola shares fell 8.28% on Tuesday. - CNBC's Michael Wayland and Michael Bloom contributed reporting.
(This story is for CNBC PRO subscribers only.)