Nikola moving battery manufacturing from California to its Pinal County plant
Three months after completing its acquisition of battery maker Romeo Power Inc., Phoenix-based zero-emissions auto maker Nikola Corp. says it will move its battery manufacturing operations to Arizona.
The move will transfer those operations from Cypress, California — where Romeo is based — to Nikola’s plant in Coolidge in Pinal County, south of Phoenix.
Nikola (Nasdaq: NKLA) said the objective is to bring truck assembly, fuel cell power module assembly, and battery module and pack production under one roof. It also will involve automation of the battery line with quality and efficiency in mind, the company said.
“This decision reinforces our commitment to finding ways to optimize our cost structure and create a sustainable business model,” Nikola President and CEO Michael Lohscheller said in a statement. “We remain focused on meeting our 2023 milestones, including pack and module production targets.”
To avoid disruptions, battery manufacturing will continue in California through the end of the second quarter of 2023 while Nikola brings production capabilities online in Coolidge and works through its transition plan, company officials said.
By July, the production facility in Cypress is expected to close, but Nikola said that it intends to maintain a separate facility in California for engineering of its next generation battery management system software and modules.
Nikola acquired Romeo Power for $144M
Nikola was Romeo’s largest customer when it first announced in August that it would purchase the battery maker in a $144 million deal. At that time, Nikola said Romeo’s California facility would be its “Battery Center of Excellence.”
The acquisition was finalized on Oct. 14 through a second-step merger of a wholly-owned subsidiary of Nikola with and into Romeo, Nikola said.
On Wall Street, Nikola stock got a mild jolt after the battery production news was announced. The shares closed at $2.55, up 4 cents, or $1.6%. That’s down significantly from its 2022 high of more than $11.33 back in March. Nikola is one of several Arizona companies that saw their share price plummet more than 75% in 2022. Track the stock here.
Nikola began making trucks at the Coolidge factory in April, and in August the company announced its first significant revenue after selling 48 trucks in the second quarter of 2022.
In September, Nikola quietly acquired a nearly 1,000-acre site in Buckeye for $16.5 million, and soon after that it confirmed that it planned to build a hydrogen production facility there.
In connection with that hydrogen hub, Nikola has also applied for potentially $1.3 billion in federal loan money for the hub through the Innovative Clean Energy projects program with the U.S. Department of Energy Loan Program Office. And the company signed a deal with hydrogen energy company Plug Power to purchase a liquefaction system for the Buckeye facility.