Nikola (NASDAQ:NKLA) showcased its progress in transitioning to hydrogen-fuel cell trucks on Thursday, announcing that it had secured 277 non-binding orders, despite facing challenges from battery fires that impacted its business in the third quarter and led to a larger financial loss.
The company revealed that orders for hydrogen-fuel trucks were exceeding its current manufacturing capacity for this year, and the trucks ordered recently would not be delivered until the second quarter of the following year. In the current quarter, Nikola anticipates delivering up to 50 vehicles.
Nikola’s shares experienced an approximately 11% increase following this news.
In August, the company issued a recall for all 209 battery-powered electric trucks it had delivered and halted sales due to an investigation revealing a coolant leak inside the battery packs, which was causing fires in their vehicles. Nikola acknowledged that the issue extended beyond the coolant manifold.
Despite the recall, the company managed to receive orders for 47 Tre battery-electric trucks from a dealer. The estimated cost of the recall and repairs is approximately $61.8 million, encompassing expenses related to re-engineering, validation, and retrofitting trucks with an alternative battery solution.
For the fourth quarter, Nikola expects to report revenue ranging from $11.3 million to $18.8 million, which falls significantly below the expectations of $44.3 million from LSEG estimates. The cost of the recall is also expected to increase the capital requirement for achieving profitability by 2025.
Nikola reported a net loss of $425.8 million for the quarter ending on September 30, compared to $236.2 million for the same period the previous year. The company’s cash balance at the end of September increased to $362.9 million following a $250 million capital raise in the third quarter.
During the earnings call, Nikola mentioned that, after streamlining its assembly line earlier in the year, it may not need to make further capital investments for capacity expansion in the coming years.
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