Electric truck manufacturer Nikola (NASDAQ:NKLA) is facing a turbulent period as it announced the appointment of its fourth CEO in as many years on Friday. The company is grappling with a series of challenges, including depleting cash reserves, supply chain constraints, and a shift toward hydrogen fuel cell technology.
Following the announcement, Nikola stock took a sharp hit, plummeting nearly 13% in early trading. The change in leadership involves Chairman Stephen Girsky taking over the reins from Michael Lohscheller with immediate effect. Girsky, a former member of General Motors’ (NYSE:GM) board, previously served as an adviser to the CEO and finance chief of Chevrolet’s parent company.
The reason behind Lohscheller’s departure is cited as a family health matter, which will see him return to Europe. Despite stepping down, he will continue to serve in an advisory role until the end of September.
On a more positive note, Nikola (NASDAQ:NKLA) reported a narrower second-quarter loss, partially attributed to reduced production of its Tre battery-electric trucks during the April-June period, which helped control costs.
However, the company has been grappling with dwindling cash reserves due to the significant expenditure involved in scaling up truck production. Despite this financial strain, the company’s investors approved a proposal during an annual shareholder meeting that allows Nikola to issue more shares to raise funds. This decision came after the meeting faced two delays, as shareholder approval was initially withheld. Founder Trevor Milton, in his first social media post in years, voiced his opposition to this move, stating that the company requires new leadership rather than new shares.
It’s worth noting that Milton stepped down as CEO in 2020 following a damning report from short seller Hindenburg, which accused Nikola of being a “fraud.”
Moreover, last month, Nikola (NASDAQ:NKLA) decided to liquidate the assets of battery maker Romeo Power, which the company had acquired for $144 million less than a year ago.
As Girsky takes on the role of Chairman, Steve Shindler, a board member since 2020, is set to assume the position of Chairman following the recent appointment.
The appointment of yet another CEO raises questions about Nikola’s ability to stabilize its leadership and overcome the various obstacles it faces in the electric truck industry.
Featured Image: Megapixl
Author Faith Yakubu 
