Nikola Corporation reports third quarter 2023 results

Nikola Corporation, a global leader in zero-emissions transportation and energy supply and infrastructure solutions, via the HYLA brand, today reported financial results and business updates for the quarter ended September 30, 2023.

“We are driving forward, capitalizing on our first-mover advantage with our hydrogen fuel cell electric truck and laying the foundation for the ‘hydrogen highway’ starting in California,” said Nikola CEO Steve Girsky. “We think the competition is well behind us and believe there is white space for us to capture market share with the introduction of the Advanced Clean Fleets Rule, and incentives like HVIP and ISEF offering up to $288,000 and $408,000, respectively, per hydrogen fuel cell electric truck in California.”

“I am proud of the Nikola team and have enjoyed leading such a talented and resilient group in my first quarter as CEO. We continue to attract world-class people to execute on our business plan and work towards establishing ourselves as the leader in zero-emissions commercial transportation.”

Strong industry tailwinds

We believe there are strong industry tailwinds promoting the adoption of zero-emissions vehicles. In California, beginning January 1, 2024, all new trucks registered with the California Air Resources Board for operation in California ports must be zero-emissions. In addition to regulations requiring fleets to transition to zero-emissions trucks, there are also incentives such as HVIP and ISEF offering up to $288,000 and $408,000, respectively, per hydrogen fuel cell electric truck in California, promoting the purchase of zero-emissions trucks.

There are over 30,000 (1) trucks operating in California’s ports, all of which will need to be replaced as they age. We believe this represents a significant opportunity for Nikola in the near term and are well on our way to capturing market share. As of October 27, 2023, for HVIP voucher requests in 2023, our hydrogen fuel cell electric truck represented approximately 96% of the created vouchers for hydrogen fuel cell electric truck-tractors, and our battery-electric truck represented approximately 50% of the created vouchers for battery electric truck-tractors. Our team is hard at work looking for every opportunity to sell our trucks and converting fleets to Nikola customers.

Hydrogen fuel cell electric truck

On September 28, 2023, we formally launched the model year 2024 hydrogen fuel cell electric truck at our state-of-the-art manufacturing facility in Coolidge, Arizona. The event attracted approximately 900 in-person attendees, including customers, dealers, suppliers, energy partners, members of the media, and government officials.

To date, Nikola and our dealers have received 277 non-binding orders from 35 customers for the hydrogen fuel cell electric truck. We remain laser-focused on go-to-market activities in California. Our sales team is on the ground daily working closely with our dealers and customers to find the best opportunities.

Customer demos have started in Southern California using hydrogen mobile fueling solutions and third-party fueling infrastructure to support fleet operations. To date, the hydrogen fuel cell electric trucks in demo have accumulated more than 6,000 miles while achieving 98% uptime.

Battery-electric truck

In August we issued a voluntary recall for the battery-electric truck. Upon further investigation, it was determined that the compromise of the battery packs was not limited to only the coolant manifold. As a result, our team has decided to replace the Romeo packs on existing customer battery-electric trucks with an alternative solution.

Costs to Nikola for this recall and repair is expected to be approximately $61.8 million (accrued as a warranty liability in Q3 2023), which includes the estimated cost to re-engineer, validate, and retrofit the battery-electric trucks that were previously sold with an alternative battery pack solution.

Actual cash disbursements are expected to take place over the next nine to 12 months and are expected to be partially offset by collection of $10.7 million of accounts receivable and a $13 million cash contribution from sale of the remaining battery-electric trucks in our inventory, resulting in an estimated net cash spend of $38.1 million. We anticipate delivering battery-electric trucks to customers again in Q1 2024.

Energy

With the launch of the hydrogen fuel cell electric truck, our team is focused on ensuring we have adequate hydrogen supply and fueling solutions to support customer operations. We have secured adequate hydrogen supply to support customer operations in 2023 and the beginning of 2024. Our energy team is working diligently ahead of truck sales to obtain additional supply and infrastructure solutions for 2024 and beyond.

Third Quarter Financial Highlights

(1) Data from California Air Resources Board; Class 8 tractors in drayage operation

SOURCE: Nikola