Nikola Suspends Truck Production due to the First Quarter Losses

2023-05-10 17:44

According to media, the US electric truck manufacturer Nikola mentioned on May 9 that its losses in the first quarter of this year widened year-on-year. Nikola also said it would suspend production to streamline their assembly line in Arizona due to the receding demand for its all-electric trucks.

Nikola said that the assembly line at the Coolidge plant will resume production in July this year, and produce both hydrogen fuel cell trucks and pure electric trucks. But more attention would be given to the the production of hydrogen fuel cell trucks.

They also announced that they would continue to cut costs and produce all-electric trucks based on the order volumes. Its share prices fell 13% after the announcement.

Investors are now focusing on the cash reserves of Nikola and other electric carmakers, as they worry that the company might issue more shares to raise cash due to the falling sales.

Nikola spent $240 million in cash in the first quarter of this year while that is $200 million per quarter in 2022. "This level of cash burn is unsustainable for our business and we are looking at every option to reduce expenses," Stasy Pasterick, the company's chief financial officer, told analysts on an earnings call. The company is also looking to raise more cash. Nikoka's net loss widened to $169.09 million in the first quarter from $152.94 million a year earlier.

In addition, Nikola also said it would sell its 50 percent stake in a European joint venture with Italian truck maker Iveco to focus on the North American market. The company also mentioned that it was evaluating a potential restructuring of its Romeo Power battery manufacturing unit, which could include selling assets or filing for bankruptcy. Nikola bought its battery supplier Romeo last year for $144 million to strengthen its supply chain.

 American electric truck manufacturer

 new energy electric vehicles