Still Truckin’: Nikola to deliver 300 vehicles, hire hundreds and open hydrogen fueling in 2022
Nikola, the Phoenix-based hybrid and electric truck maker, announced a flurry of company updates on Thursday, including that it planned to deliver at least 300 trucks and hire 400 people by the end of the year.
The company delivered its first battery electric vehicle (BEV) in December and on Thursday said it expects to deliver its first batch of saleable vehicles by the second quarter of this year. But supply chain issues linger and the executive team cautioned that a lack of components may be an issue in 2022.
These first expected deliveries will mean that Nikola can finally start generating revenue; it expects to make between $90 million and $150 million this year after generating no revenue and running a net loss of $690 million in 2021.
Nikola Corp. (Nasdaq: NKLA) made these announcements during its fourth year and full year earnings call early on Feb. 24. Nikola shares were down more than 30% year to date through Wednesday, but have gained more than 8% at last check of Thursday trading on the news. Follow the stock here.
Factory update
Nikola also said it expects to complete phase one of factory construction in Coolidge, south of Phoenix, by the end of March, where the company said it aims to produce 2,500 trucks this year. Nikola’s joint venture plant with Iveco in Ulm, Germany is now complete and capable of producing 2,000 vehicles annually, with 25 slated for delivery to the Hamburg Port Authority this year.
Upon further expansion, which will be completed in Q1 2023, the Coolidge site is expected to turn out 20,000 trucks a year.
“Diesel is going away, it’s going to be gone. And you’ve got to have a zero emission solution,” Nikola CEO Mark Rusell said during the earnings call. “The two questions are, what is it going to cost me? And will it be equivalent to my diesel experience? …We are answering the questions about the long-term future of commercial transportation right now as we speak, and I don’t see anybody doing it better than we are.”
While the hiring and production are positive signs for a company with a rocky history, Nikola said it is dealing with major supply concerns that may impact its ability to produce trucks this year. The company expects to produce between 300 and 500 in 2022, but executives are keeping a close eye on supply availability.
During the earnings call, Nikola CFO Brady Kim said that nothing is guaranteed in today’s supply environment.
“We are vigilant and paranoid, meaning confirming, double checking and verifying, trying to navigate the parts shortages every day and not cause delays to the serious production of Tre BEV build schedule.”
Specifically, Kim said the company is keeping an eye on battery cells, battery packs, microelectronics like semiconductors, displays and inverters, though supply pinches are expected to alleviate in the second half of this year.
Nikola has entered a long-term supplier agreement for battery cells with LG, one of the largest battery makers in the world, as well as an agreement for cells and packs with Proterra, a smaller California-based supplier, which was announced last month.
On Thursday Nikola said it had secured an allocation of 2,400 battery cells so far for this year, but has only secured 300 complete packs to date and the company needs both to assemble a truck.
Hydrogen fueling coming
Since its inception in 2015, Nikola has had lofty goals, including the construction of hydrogen fueling stations to refuel the company’s fuel cell electric vehicles, or FCEVs.
On Thursday CEO Russell said the company would break ground on its first hydrogen production hub in Arizona later this year, though the company had made the same projection at this time last year.
“We knew it’d be difficult, but it’s been more difficult than we anticipated to actually get the first locations permitted, ground broken, construction commenced, because we haven’t done it yet. I can tell you, we are close,” he said. “The first hub that we build will be somewhat of a unique facility in the world to produce hydrogen at commercial scale, from hydrogen electrolysis.”
Nikola secured a special, lower rate to get electricity from APS last year, which will allow for cheaper generation of hydrogen fuel. The company also invested $50 million into an Indiana hydrogen fuel production project last year which will aid adoption in the Midwest.
The company employed 905 at the end of 2021 and CFO Brady said they plan to boost headcount up to 1,300 or 1,400 by the end of the year. Nikola had 165 job openings on Thursday, according to the company’s hiring site, almost all of which were for positions in Phoenix and Coolidge.
Nikola also announced a shift of its board of directors on Thursday; Lynn Forester de Rothschild of Inclusive Capital Partners will replace Jeff Ubben, a co-founder of Inclusive Capital, on the board.
Nikola recently agreed to pay $125 million to the Securities and Exchange Commission to settle charges that it had defrauded investors by misleading them about its commercial prospects.
The settlement will be paid in five installments, the first of which the company made in December. On Thursday, Russell said that the company is seeking reimbursement for the payments from Trevor Milton, the company’s founder, who has separately been charged with multiple counts of fraud by the SEC.