Nikola receives more orders for fuel-cell truck, posts wider loss

Nov 2, 2023

(Reuters) -Nikola showed progress in its shift to hydrogen-fuel cell trucks on Thursday, saying it has secured 277 non-binding orders even after battery fires rocked its business in the third quarter and pushed the company to a larger loss.

The company said the hydrogen-fuel truck orders would outpace its manufacturing capacity this year and the trucks ordered today would not be delivered until the second quarter of next year.

Nikola, whose shares rose about 11%, expects to deliver as many as 50 vehicles in the current quarter.

The company in August recalled all the 209 battery-powered electric trucks that it had delivered and suspended sales after an investigation found a coolant leak inside a battery pack causing fires in its vehicles.

“Upon further investigation, it was determined that the compromise of the battery packs was not limited to only the coolant manifold,” the company said.

Despite the recall, Nikola said it received orders for 47 Tre battery-electric trucks from a dealer.

The company said cost of the recall and repair is expected to be $61.8 million, which includes the cost to re-engineer, validate and retrofit trucks with an alternative battery solution.

Nikola expects to recognize revenue of $11.3 million to $18.8 million for the fourth quarter, well below LSEG estimates of $44.3 million.

It expects cost of the recall to result in an increase in capital it will need to reach profitability in 2025.

Net loss for the quarter ended Sept. 30 stood at $425.8 million, compared with $236.2 million a year earlier.

The company’s cash balance at the end of September rose to $362.9 million after it raised $250 million in the third quarter.

But Nikola said in an earnings call that after streamlining its assembly line earlier this year, it may not have to spend more capital on capacity expansion for a few years.

(Reporting by Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)


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