While Nikola’s CEO maintains the company has had a “very solid quarter,” mounting financial losses, a production pause and the dissolution of its joint venture with Iveco appear to be cracks in the company’s facade.
Although the maker of commercial trucks posted $11.1 million in total revenues for the first quarter of 2023---up from $1.8 million in 2022---its losses for the quarter amounted to $169 million. By comparison, in the first quarter of last year, Nikola lost $152.9 million.
Nevertheless, Michael Lohscheller, the company’s CEO, said in a statement the company is “on the right path with our re-energized management and commercial teams.” Part of what’s fueling the executive’s optimism may be the performance of its hydrogen fuel cell truck.
Nikola reported it has 140 orders for the hydrogen-powered Tre, but production isn’t supposed to begin until July. Meanwhile, orders for the electric Tre are stagnating. Although the company managed to make 63 of them in Q1 2023, it sold just 33, and it is now pausing production of the truck.
“As we have sufficient inventory of the battery electric truck, we will temporarily pause production in Coolidge, [AZ,] as we modify the assembly line to accommodate both hydrogen fuel cell and battery electric builds on the same line,” the company wrote May 9. “After we resume production in Coolidge, the battery electric Tre will remain in our lineup as a build-to-order product.”
Iveco to Buy Full Ownership of Joint Venture
As the company looks for cash to support work on the plant and other projects, it announced it will give up its stake in the joint venture company it founded with Iveco in 2019. It says it will instead focus on the U.S. market, where legislation, especially in California, is increasingly mandating the use of non-internal-combustion heavy-duty trucks.
For its share in the JV, Nikola said it will receive $35 million in cash, as well as 20.6 million shares of common stock in its own company that will be returned to it by Iveco. However, it said it remains on good terms with the Italian commercial vehicle manufacturer.