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Nikola reports 3Q loss following recall and sales pause

Published Nov 02, 2023 14:26
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Shares of Nikola (NASDAQ:NKLA) dropped nearly 3% in early trading Thursday after the company reported a wider than expected 3Q loss. The loss comes after the electric automaker suspended sales and recalled its battery-electric heavy-duty trucks.

In August, the company recalled all 209 of its battery-powered electric trucks and halted sales following an investigation that identified a coolant leak within the battery pack as the root cause of recent fires.

Nikola stated that it expects to spend $61.8 million on the recall and repair costs of the trucks, which includes the costs for re-engineering, validating, and fitting trucks with a different battery solution.

"Upon further investigation, it was determined that the compromise of the battery packs was not limited to only the coolant manifold," the company said.

Despite the recall of the Tre battery-electric truck, Nikola reported receiving orders for 47 vehicles from a dealer.

Nikola, relying on its Tre fuel-cell electric vehicles, declared receiving 277 non-binding orders from 35 customers for the hydrogen-powered truck.

The company anticipates delivering 30 to 50 trucks in the fourth quarter and generating revenue between $11.3 million and $18.8 million, significantly lower than LSEG's estimated $44.3 million.

For the quarter ending on September 30, the net loss amounted to $425.8 million, compared to $236.2 million during the same period last year.

Production was halted for the second time this year following the recall announcement, with a previous pause in May to streamline the assembly line.

The company's cash balance increased to $362.9 million by the end of September after it secured $250 million in the third quarter.

Shares of NKLA are up 7.6% in mid-day trading on Thursday.

Nikola reports 3Q loss following recall and sales pause
 

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