Nikola Cuts Electric Semi Truck Delivery Outlook

Nikola Faces Production Delays and Reduced Outlook

Nikola, the electric truck manufacturer that became publicly traded through a SPAC merger, has issued a warning regarding significant supply chain disruptions.

These constraints are leading to substantial delays, prompting a reduction in the company’s projected vehicle delivery numbers by half.

Revised Production and Revenue Forecasts

Currently in the pre-production phase, Nikola announced during its second-quarter earnings call that its initial plan to manufacture 50 to 100 electric semi-trucks this year has been revised downward to 25 to 50 units.

This less optimistic projection extends to the company’s revenue expectations.

The revenue forecast for the year has been lowered to a range of $0 to $7.5 million, a decrease from the previously anticipated $15 million to $30 million.

Financial Performance

Nikola reported a net loss of $143 million for the second quarter, an increase compared to the $115.7 million loss recorded during the same period last year.

However, the adjusted loss of 20 cents per share was more favorable than analysts had predicted.

The company concluded the quarter with a cash balance of $632.6 million.

Focus on Production and Legal Issues

While the earnings call highlighted progress in electric truck production – including the testing of pre-production vehicles and the completion of 0.5 Phase of its Arizona factory – investor attention remained focused on the lowered outlook.

The ongoing legal challenges related to founder Trevor Milton’s securities fraud charges also continue to weigh on the company.

To date, Nikola has successfully constructed 14 pre-production vehicles, comprising five alpha and nine beta prototypes.

Stock Performance and Founder's Legal Battle

Following the announcement, Nikola’s shares experienced a decline of 7.47% during midday trading.

Trevor Milton, who resigned from his positions as CEO and executive chairman last year, was formally charged on July 29 with two counts of securities fraud and wire fraud by a federal grand jury.

Prosecutors allege that Milton engaged in a public relations campaign utilizing social media and television appearances to disseminate false and misleading information about Nikola prior to the production of any actual products.

Path to Public Listing and Fraud Allegations

In March 2020, the company announced its intention to go public through a merger with VectoIQ Acquisition Corp, a special purpose acquisition company.

Following the public listing that summer, Milton actively communicated with retail investors via Twitter.

However, in September, shortly after General Motors announced a $2 billion investment, Hindenburg Research, a short-selling firm, publicly accused Nikola of fraudulent activities.

This led to an inquiry by the U.S. Securities and Exchange Commission, and within two weeks, Milton stepped down from his role as executive chairman.