Nikola Corp.
Nikola Corp. is set to pause battery-electric truck (BET) production at its Coolidge, Ariz., facility by the end of May ahead of a pivot in its operations to hydrogen fuel cell vehicles and a narrowing of its ambitions to just North America, the company said May 9.
Phoenix-based Nikola’s swing away from BETs comes as losses at the startup continued to rise in the first quarter of 2023 and executives attempt to slow the company’s furious rate of cash burn. The company posted a net loss of $169.1 million, or 31 cents per diluted share, in the most recent quarter, compared with a $152.9 million loss in the prior year period, it said.
Nikola plans to retool the Coolidge facility ahead of a scheduled production line restart in July, when BETs will only be available on a “build-to-order” basis, CEO Michael Lohscheller said during the company’s quarterly earnings call May 9.
Under Lohscheller, who officially took the reins of the company at the start of 2023, Nikola plans to narrow its focus to North America, hydrogen fuel cell electric trucks, its HYLA hydrogen refueling business and autonomous technologies.
Earlier in May, Nikola inked a deal with Herndon, Va.-based electric and hydrogen fueling infrastructure specialist Voltera to develop up to 50 HYLA hydrogen refueling stations. Voltera is backed by the deep pockets of Sweden investment group EQT.
The revamp will also see Nikola selling its stake in a European Class 8 truck manufacturing joint venture with Iveco Group to the Italian company for $35 million cash and 20.6 million shares, a deal announced in the hours prior to the earnings statement. Nikola plans to raise funds by selling the shares, Chief Financial Officer Stasy Pasterick said during the company’s earnings call.
Addressing Nikola’s cash needs is a top priority, Pasterick said, noting that the company was targeting cash burn of $150 million per quarter, down from $200 million a quarter in 2022. Nikola’s April cash burn was less than $50 million, she added in a presentation.
Nikola is losing money on each BET it sells. The company produced 63 Tre BETs in the most recent quarter and delivered 31 to dealers. The company’s Tre BET sales rose to 33 in the quarter, which it said was a significant increase from 2022. Still, the company has sufficient BET inventory to be able to pause production.
Lohscheller said in the earnings statement the company was building sales momentum and backlog for its hydrogen truck, adding that orders for 140 have been received from 12 end customers. Hydrogen fuel cell truck serial production is currently on schedule to begin in July, he added. Hydrogen trucks will be available to customers later in 2023, the company’s top executive said during the call.
“The future of Nikola is hydrogen,” Lohscheller said on the call, adding that the upside in the U.S. and Canada was “unlimited” due to government backing such as the Inflation Reduction Act and the Department of Energy’s loans for innovative automotive and clean energy companies. Nikola is continuing to work on completing Phase 2 of the DOE Loan Program Office application process, it said.
Down the line, the company also hopes to produce green hydrogen, and Lohscheller said Nikola continued to work closely with Australia’s Fortescue Future Industries on the development of large-scale U.S. green hydrogen production facilities.
