Nikola Corporation, the electric truck manufacturer, is facing further setbacks as it continues to grapple with the recall of its battery electric trucks. While the company has made progress by returning 78 of the recalled trucks to customers and dealers, a significant number – 81 – remain undelivered. This delay throws a wrench into Nikola’s delivery goals and adds pressure to an already challenging financial situation.
During the company’s third-quarter earnings call, Nikola CFO Tom Okray acknowledged the remaining 81 trucks still part of the recall. He stated that they have a total of 230 trucks available, including the 150 in their inventory and the 81 under recall. These trucks present a strategic opportunity for the company, offering a path forward to regain customer confidence and bolster its fleet.
Nikola initially focused on delivering battery electric trucks (BEVs) before transitioning to hydrogen fuel cell electric trucks. However, after several reported fire incidents involving the BEVs, the company initiated a recall in August 2023. The company is now equipping the recalled trucks with improved battery packs and rebranding them as BEV 2.0.
Earlier this year, Nikola expressed optimism about delivering at least 100 BEVs in 2023 after addressing the issues that led to the fire incidents. They had also indicated that all recalled vehicles would be returned by the end of the second or third quarter. However, the delay in returning these 81 trucks suggests a continued struggle to overcome the challenges stemming from the recall.
The financial performance for the third quarter further highlights Nikola’s struggles. The company reported revenue of $25.18 million, falling short of analyst expectations of $37.23 million. Additionally, Nikola recorded an adjusted loss of $2.75 per share, exceeding estimates for a loss of $2.35 per share.
Following the news, Nikola’s share price took a hit, closing down 7% at $3.93 on Thursday. This continues a downward trend for the stock, which is down 84.3% year-to-date.
This news underscores the ongoing challenges faced by Nikola as it strives to regain momentum in the competitive electric vehicle market. The company’s ability to address the recall, restore customer trust, and improve its financial performance will be critical in determining its future success.
