EV truck maker Nikola stalls in 2023, pulls out of Europe, hits brakes on production

If Q1 was 'very solid,' what does a bad quarter look like?

Electric truck maker Nikola had an absolutely dismal first quarter, leaving it to refocus its efforts by pausing production and backing out of a joint venture to produce vehicles in Europe. 

While the automaker described its first quarter of 2023 as "very solid," the numbers provided by the biz paint a very different picture: Nikola's net loss in Q1 grew by more than $10 million from this time last year to a thumping $169 million in the red.

Despite earning considerably more revenue in Q1 2023 ($11.1 million) than the same quarter last year ($1.9 million) Nikola still reported a gross loss of nearly $33 million, versus $431,000 in gross profit over the same period in 2022. 

As for those curious whether Nikola is delivering its promised vehicles, even the official company line had a hard time massaging 33 retail sales of its Tre electric semi truck in a quarter as a good result; the company still called it an "uptick." 

Nikola reported 63 Tre battery electric trucks produced in the first quarter, with 31 shipped to dealers and the aforementioned 33 sales. The automaker also announced 140 of its hydrogen fuel cell trucks have been ordered by 12 customers; those vehicles will begin production in July. 

Despite (or maybe because of) those low production, delivery and sales numbers, Nikola said it has "sufficient inventory" will pause production at its Coolidge, Arizona plant at the end of this month.

Don't assume the production pause means it's the end of the company, at least not yet - Nikola said it's taking a break to modify its assembly line to accommodate both its battery electric trucks and the hydrogen fuel cell vehicles it intends to make a primary focus going forward.

"We have reprioritized the business, focusing on the North American market, hydrogen fuel cell trucks, HYLA hydrogen ecosystem, and autonomous technologies, vehicle controls, and software," Nikola said in its earnings press release.

Electric car market troubles

As the big three US automakers have become more invested in the EV space, things for their upstart challengers have continued to get worse. 

Tesla's Q1, for example, saw it bring in more revenue than expected, but with a 24 percent drop in net income that CEO Elon Musk attributed to an uncertain macroeconomic environment discouraging consumers from buying new cars. 

Rivian, which has been riding right alongside Nikola on the fast track to losses, plans to report its Q1 earnings later today. Analysts expect Rivian to post a considerable year-over-year revenue estimate, but with a loss of $1.58 per share.

Earlier this year Rivian tried to back out of its deal with Amazon that made it the sole customer for its electric delivery vans because Amazon decided to buy far fewer of them than originally expected. 

Earlier this month, J.D. Power said that fewer consumers are also interested in buying EVs. Lack of charging stations and purchase price were cited by survey respondents as the primary reasons a full 21 percent of likely car buyers said they were avoiding an EV. 

The other part of its focus on North America saw the company announcing plans to divest from its stake in a joint venture with Italian truckmaker Iveco Group that the pair began in 2019. Nikola said exiting the venture earned it $35m cash and the return of 20.6 million company shares that were held by Iveco. The Italian company will continue to supply chassis and related components to Nikola and "are expected to remain a meaningful stockholder," Nikola said. 

Nikola's founder and former CEO, Trevor Milton, was convicted late last year of two counts of wire fraud and one count of securities fraud for lying to Nikola investors before taking the company public in 2020. 

Nikola's stock has plummeted by more than 15 percent since the earnings were announced earlier today. ®