Nikola Corp. flouted a broad market decline as the company said it will start full-scale output of battery-electric trucks next month and deliver between 300 and 500 to customers this year.
Thursday’s announcement that it is moving beyond production of prototypes indicated progress as the big-rig maker attempts to recover from supply-chain constraints that have affected product launches. It also faces a credibility crisis after founder Trevor Milton was indicted and accused of lying to investors about the company.
The truckmaker’s shares advanced 7.5% to $7.34 at 11:12 a.m. in New York despite a broader slump after Russia invaded Ukraine. Nikola had dropped 31% this year through Wednesday’s close.
Despite the company’s encouraging delivery forecast, semiconductor availability remains “extremely challenging” and there is “no guarantee” of any parts supply for this year, Chief Financial Officer Kim Brady said on a conference call with analysts.
And though Nikola has sufficient access to battery cells for 500 trucks this year, the top of its forecast range for deliveries, it only has secured complete packs for 300 of the vehicles, he said. The company has access to enough cells for 2,400 trucks next year and suppliers have offered good signals on ramping up capacity, Brady said.
Nikola reported an adjusted loss of 23 cents a share for the fourth quarter, narrower than the 32-cent loss projected by analysts surveyed by Bloomberg. The Phoenix, Arizona-based company has yet to generate revenue. Nikola will start delivering revenue-generating trucks in the second quarter, Chief Executive Office Mark Russell said on a conference call with analysts.
The first phase of construction on the company’s Coolidge, Arizona, plant will be completed by the end of this quarter, Nikola said. The facility currently can make as many as 2,500 trucks a year. A second facility, in Ulm, Germany, which Nikola operates jointly with CNH Industrial NV’s Iveco unit, has been completed and can assemble 2,000 trucks annually.
Last month, Nikola announced a long-term battery supply deal with Proterra Inc. And on Tuesday, the truckmaker announced it had hired Michael Lohscheller, who oversaw the turnaround of Stellantis NV’s Opel division, to help ramp up production.
Nikola said it has made its first payment as part of a $125 million civil settlement with the U.S. Securities and Exchange Commission regarding statements by Milton, who was force to resign. The company is seeking reimbursement from him.
Nikola also announced that Inclusive Capital Partners co-founder Jeff Ubben resigned from the board on Feb. 17. The hedge-fund manager, an early Nikola investor, had been a director since September 2019. He regularly promoted the company’s long-term vision for hydrogen as a fuel for commercial vehicles and in TV interviews defended comments made by Milton.
Ubben was replaced on the board by Lynn Forester de Rothschild, also of InCap.
