Nikola’s cash position improves but losses widen in Q2

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Nikola Corp. added $107 million in unrestricted cash to its balance sheet from asset and stock sales in the second quarter. But its year-over-year loss grew as production of hydrogen-powered fuel cell trucks began.

The electric truck and hydrogen distribution startup reported revenue of $15.36 million compared to $18.13 million in the year-ago quarter. The net loss of $217.8 million compared to $173 million a year ago. The per-share loss of 20 cents beat analysts’ estimates by 2 cents. Revenue was $500,000 higher than forecast.

In his last quarterly conference call as CEO, Michael Lohscheller said Nikola has made significant progress toward ramping up fuel cell truck production and in partnerships to develop green hydrogen to fuel the trucks.

Lohscheller is stepping down to attend to a family health matter at home in Europe. He will remain an adviser through September. Chairman Steve Girsky takes over as the company’s third CEO in less than a year. Lohscheller will resign his board seat at the end of August. Board member Steve Schindler will succeed Girsky as board chair.

“Nikola has turned the corner and is well on the way to executing our business plan and achieving profitability,” Lohscheller said in a news release. “We have nearly doubled our unrestricted cash position while also substantially reducing our spending.”

Inventory overhang

The Phoenix-based company wholesaled 45 battery-powered Class 8 trucks in the quarter and sold 66 at retail. Nikola still had an overhang of 139 battery-electric vehicles (BEVs) with 92 unsold trucks at dealers. The average retail price was $324,000, consistent with Q1.

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One of those BEVs caught fire in late June and spread to four other trucks, Lohscheller said. The same truck reignited on July 24. Nikola is still trying to determine the cause of the fire after initially suggesting foul play.

The assembly line at Nikola’s plant in Coolidge, Arizona, can now build any mix of BEV and fuel cell electric vehicles (FCEVs). It will focus on FCEVs for the rest of the year and resume BEV production on a build-to-order basis in 2024. The first delivery of a series production FCEV is expected by the end of September.

Nikola has 202 FCEV orders from 18 customers. The plant is capable of producing 2,400 trucks a year on three shifts. A fuel cell power module assembly line is expected to be completed in Q4. Until then, fuel cell power modules will be built and shipped to Coolidge by supplier Robert Bosch.

$600 million in new capital needed

Nikola needs to raise $600 million in capital to reach full production, CFO Stasy Pasterick told analysts on a conference call. At least some of that is likely to come from sales of new shares authorized on Thursday by existing shareholders. As new shares are registered and sold, current shareholders could see the value of their holdings diluted.

Sale of 1,000 trucks could allow Nikola to be neutral on an earnings before interest, taxes, depreciation and amortization basis by 2025. The fuel cell trucks will sell for $400,000, Pasterick said. That would be net of state and federal incentives, which in California could amount to as much as $328,000.

Nikola shares (NASDAQ: NKLA) traded 18% lower at $2.77 before the close Friday following the earnings report and executive transition. Shares have been on an upward tear the past two months, rising from a low of 55 cents on June 6 to close Thursday at $3.40.

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Not all of the money Nikola needs will necessarily be dilutive, Girsky said.

“We have resources. We have shares if we need them [and] we have other resources,” he said on a call with reporters on Friday. “Let’s be honest. This is about selling trucks. Selling the trucks creates validation around the business model and the hydrogen model which would bring in capital on its own. It also helps lower costs.”

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Delaware clears the way for Nikola to increase share count

Nikola cashes out of European JV and refocuses on fuel cells at home

Click for more FreightWaves articles by Alan Adler.

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