The electric truck manufacturer has just taken an important step in its young history. And it’s a step that could change his future.
Indeed, in April the group delivered the first units of its long-awaited Tre battery electric trucks. In fact, the company that started producing the Tre BEV at the end of March delivered 11 vehicles in April, which is a first.
“During the first quarter, we reached a significant milestone with the start of serial production for the Nikola Tre BEV at our Coolidge, Arizona manufacturing facility and are currently delivering saleable trucks to dealers for customer deliveries,” said Mark Russell, Nikola’s chief executive officer, in the first quarter press release.
“We look forward to scaling production and delivering 300-500 production vehicles to customers this year,” he added.
This optimism contrasts with the problems facing the entire automotive sector today. The resurgence of Covid-19 in China has led authorities to impose strict lockdowns in the country, which has resulted in the closure of factories and continued disruptions to supply chains. Suppliers to vehicle manufacturers are therefore struggling to keep up, which significantly slows down the assembly of vehicles. In addition, the Russian invasion of Ukraine drove up the prices of raw materials such as nickel used in battery development.
But Nikola explained that it had received supplier commitments to meet its 2022 delivery goal.
“The ongoing war in Ukraine and the recent Covid outbreak in China were factors that we did not anticipate when we last discussed supply chain issues back in February,” Kim Brady, Chief Financial Officer, told analysts during the earnings call. “The zero Covid policy in China has led to additional bottlenecks and cost pressures in more recent months.”
“While there is still uncertainty about the magnitude and duration of any other supply chain impact from this event, we continue to have full supplier commitment and are confident in our ability to achieve our full-year target range without making revisions. Based on our current line of sight, we reconfirm the key electrical components available to meet our delivery targets,” he added.
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Brady assured analysts that Nikola has enough battery cells to build more than 500 Nikola Tre BEVs, and battery packs to build 300 to 500 Nikola Tre BEVs.
“Our supply chain team is working closely with the battery pack supplier to ensure no gaps in the battery module chip supply, so as to not disrupt Nikola’s build schedule,” the executive said.
It is therefore logical that Nikola made forecasts which pleasantly surprised investors. The EV truck maker anticipates second-quarter revenue to be between $15 million and $18 million and delivery of between 30 and 50 trucks. These figures are higher than the expectations of analysts, who expect for example revenue of $11.5 million in the second quarter.
In the first quarter, Nikola generated revenues of $1.89 billion from sales of charging trailers for its Tre battery electric trucks. However, its net loss widened to $152.94 million from $120.2 million a year earlier.
Nikola’s horizon seems to be clearing up a bit. The company announces that it has succeeded in signing letters of intent for the purchase of its trucks with buyers. To date, the company said it has received purchase orders and memorandum of understanding agreement for a total of 510 Nikola Tre BEVs.
In addition to the Tre BEV, the company is also developing an hydrogen fuel cell electric semi truck, the Tre FCEV, with a range of up to 500 miles and a refuel time of under 20 minutes that would enable it to carry freight over longer distances.
“Tre FCEV alpha pilot testing with Anheuser-Busch in Southern California was successfully concluded on April 29,” Nikola said. “The Tre FCEV alphas logged over 12,000 miles in A-B operations.”
The start of serial production is scheduled for the second half of 2023.
Nikola shares, which went public in May 2021, are currently trading around $6.75. They fell by 41.3% in one year. Nikola shares have suffered from the recent sell-off of growth group stocks on Wall Street on fears of recession.