Deliveries of Nikola FCEV trucks begin before the end of September

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The first deliveries of Nikola’s Class 8 hydrogen fuel cell truck are scheduled to begin as early as late September, Nikola CEO Steve Girsky said on Sept. 13.

Production of the Tre fuel cell electric vehicle began July 31 at the Nicola College, Arizona, manufacturing plant after a retooling process that began in May.

The Coolidge facility is operating at a rate that produces 2,400 hydrogen-powered trucks a year, he said.

The first trucks rolling off the production line are undergoing final testing before being delivered, Girsky, who took over the CEO role on Aug. 4 from Michael Loeschler, said during a fireside chat hosted by Nikola.

One truck undergoing testing drove more than 900 miles in one day recently, he said, adding, “I challenge anyone to find another zero-emissions truck anywhere that can drive up to 900 miles a day.”

“There’s a lot of headroom between Nikola and the competition in the Class 8 zero-emission truck market,” he said, comparing the company’s lead with legacy OEMs and fellow disruptors to that achieved by Tesla in its electric passenger vehicle. Space a decade or so ago when Girsky was working for General Motors.

To date, the company has 210 FCEV orders. During the company’s Q2 2023 earnings call on August 7, CFO Staci Pastrick said Nikola expects to deliver 300-400 FCEV and battery electric trucks in 2023.

Today, Nikola President and CEO Steve Girsky engaged in a frank and informative conversation and question-and-answer session to share valuable insights into the company’s strategic direction and current developments as they relate to four key topics based on incoming shareholder questions. the… pic.twitter.com/r9ay7UYkWz

– Nikola Motor Company (@nikolamotor) September 13, 2023

Sales and deliveries of Class 8 Tre BETs have been suspended following a series of battery fires, including on June 23, August 10 and September 8. The company said on August 11 that a total of 209 trucks had been recalled.

Girsky said on September 13 that the problem behind the recall is limited to one-time battery packs made by Nikola subsidiary Romeo Power. Nikola acquired Romeo in August 2022 for $144 million. In July, Nicola began liquidating Romeo’s assets.

Class 4-6 truck maker Mullen Automotive on Sept. 11 purchased Romeo’s battery production assets for $3.5 million.

The production floor of Romeo Power’s manufacturing plant. The problem behind the recall is limited to battery packs made by Romeo, a former subsidiary of Nikola. (Romeo Power)

Nikola’s stock is being returned to the Coolidge factory to fix a coolant leak inside the battery pack. The coolant leak involved the cooling manifold and related cooling lines, expanding understanding of the problem beyond the details released on Aug. 11, Girsky said.

Each BET contains nine battery packs, and each battery pack contains two cooling loops, the company’s CEO said, adding that Nikola will replace the cooling lines that connect to the manifolds as part of the repairs.

“Once the package is opened, (Nikola) will inspect all units to ensure their safety. Unit components and possibly the entire unit may need to be replaced on a case-by-case basis if any additional issues are discovered,” Girsky said, adding that the company is working to source the required parts.

The timeline and cost of the post-recall process remain uncertain, Girsky said.

Nikola halted serial production of BET in May before retooling Coolidge and starting FCEV production in July. Tre BET will now only be available on a “build to order” basis.

Phoenix-based Nikola bled cash in 2022, with its cash burn averaging $200 million. Refocusing on FCEV production only is part of the executive team’s plans to improve finances. Nikola was losing money on every bet he made.

Another aspect of the cost-cutting plans is the elimination of 270 jobs and the end of the company’s European operations. Nikola expects the layoffs to cut $50 million from its annual cash outflow.

Nikola returned to short-term debt markets in July to bolster its funds while increasing FCEV production. The company raised $124.5 million in August through the sale of convertible notes due in 2026.

Until August, Nikola was struggling to find a way to improve its liquidity. But on July 17, Delaware Governor John Carney agreed to amend Section 242 of the Delaware General Corporations Law.

Under this change, the minimum requirement to amend a company’s certificate of incorporation to increase total authorized shares will shift from a majority of outstanding common shares to a majority of shares voting on the proposal.

Nikola postponed its annual meeting twice, due to its inability to meet the minimum, before the amendment took effect on August 1. Upon maturity, the convertible debt issue becomes equity.

Some of the funds will help Nikola ramp up its Hyla hydrogen fueling business. Nikola has revamped the Hyla since its launch in January, including selling its Phoenix Hydrogen Hub production project to Fortescue Future Industries in July.

In 2023, a total of nine mobile hydrogen fueling trucks will be deployed, Girsky said. He said building the company’s hydrogen fueling infrastructure could be its biggest opportunity. Initially, hydrogen refueling trucks will be deployed along Interstate 5 and Interstate 10.

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