Automobile

Nikola trims back plans for electric truck deliveries, shares fall

Shares of Nikola Corp., the pre-production truckmaker whose founder was indicted in federal court last week with misleading investors, fell after the company lowered its initial vehicle delivery projections and warned of nagging supply chain issues.

CEO Mark Russell told analysts on a conference call Tuesday the startup is facing “numerous” delays acquiring parts and CFO Kim Brady said Nikola would deliver as few as half as many vehicles as previously forecast.

Nikola’s shares fell 7 percent to $10.40 in midday trading. It had fallen about 27 percent this year as of Monday’s close.

Investors focused more on the big-rig startup’s update about its path to full production than on its second-quarter loss of $143 million, compared with a loss of $116 million during the same quarter last year. Brady said the Phoenix-based company would deliver just 25 to 50 vehicles this year, down from a previous estimate of 50 to 100 vehicles.

Nikola, which has yet to sell a vehicle, said it’s making progress on other milestones such as ramping up its build and testing of prototypes and setting up a network of sales and service locations. To date it has built 14 pre-production prototypes of its battery-electric truck.

Founder’s legal woes

Nikola is working to put distance between itself and any repercussions from its founder’s legal woes. Trevor Milton, who founded the company in 2014, was charged by federal prosecutors July 29 for making false statements to investors. The indictment accused Milton of lying about Nikola’s business and technology capabilities. While no longer holding an active role at the company, he remains the single largest shareholder and has joint investments in it with CEO Russell.

The aspiring electric-truck manufacturer has struggled to maintain investors’ confidence and scaled-back its once-grandiose ambitions since Milton resigned in September, just three months after it went public by merging with a blank-check company.

In the last quarter, the company completed the initial phase of construction on its plant in Coolidge, Ariz. It has also started building five prototype fuel-cell powered big rigs at the facility while it concurrently starts the next phase of construction.

Nikola’s market capitalization has plummeted from a peak of almost $29 billion in June 2020 to less than $4.5 billion as of Monday. That reflects concerns about ongoing federal investigations, the collapse of a deal with General Motors to build a pickup, and the cancellation of a contract to provide electric garbage trucks to Republic Services Inc.

In recent months, the company has refocused on a few key targets. It plans to launch its first hydrogen-powered fuel cell truck in 2023. Nikola also expects to start serial production of battery-electric trucks this year in Ulm, Germany, in a joint venture with CNH Industrial NV’s Iveco unit and kick off deliveries in the fourth quarter.

The company is currently building two trial production versions of the BEV semi on the assembly line in Ulm and another two in Coolidge.

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