Nikola Corporation Reports First Quarter 2023 Results

“Nikola had a very solid quarter, building sales momentum with Class 8 battery electric truck deliveries to customers, and orders for 140 hydrogen fuel cell trucks from customers,” said Nikola CEO Michael Lohscheller. “We have the right products at the right time, and as we move forward, we will be focusing on the North American market, hydrogen fuel cell trucks, the HYLA hydrogen refueling business, and autonomous technologies.”

“We are on the right path with our re-energized management and commercial teams, improved sales strategy, new dealers, and energy partners,” Lohscheller continued.

Strategic Refocus on Nikola’s Core Business
We have reprioritized the business, focusing on the North American market, hydrogen fuel cell trucks, HYLA hydrogen ecosystem, and autonomous technologies, vehicle controls, and software. Manufacturing and energy are capital intensive businesses, and we need to remain focused where we have competitive and first mover advantages. As such, we are selling our stake in the European manufacturing joint venture to Iveco Group in exchange for $35 million cash consideration and 20.6 million shares of Nikola common stock that will be returned to us by Iveco. Iveco will remain an important partner and key supplier for us and will cheer for our long-term success, and they are expected to remain a meaningful stockholder moving forward.

The U.S. is the leader in energy transition with federal incentives such as the Inflation Reduction Act and strong truck and infrastructure incentive programs in states including California, New York, New Jersey, Colorado, and Washington. From a policy perspective, many states have been introducing strong regulations mandating zero-emissions vehicles. For example, in California, per the California Air Resources Board (CARB) Advanced Clean Fleets regulation summary, beginning January 1, 2024, only zero-emission drayage trucks may register in the CARB Online System. All drayage trucks entering seaports and intermodal railyards would be required to be zero-emission by 2035.

We are a one-stop solution for fleets to achieve compliance with regulatory requirements and take advantage of state and federal incentives, with battery electric trucks available immediately and hydrogen fuel cell trucks available later this year. By focusing on what we do best, Nikola has a first-mover advantage and can capture a sizeable share of the commercial trucking market, while also building out a hydrogen energy business capable of long-term growth.

Energy Business Progress
On May 2, 2023, we announced the execution of a joint development agreement with Voltera Power, backed by EQT. As part of the agreement, Voltera intends to supply the capital for up to 50 HYLA hydrogen refueling stations over the next five years. Our strategic partnership with Voltera is further validation of our capital light strategy and interest from financial partners to participate in the build out of our hydrogen refueling ecosystem.

We have made significant progress on PHH, receiving unanimous approval from the City of Buckeye City Council on our general plan amendment and rezoning application. We are ordering long lead-time equipment and continue to work on completing Phase 2 of the Department of Energy Loan Program Office application process. We also continue to work closely with Fortescue Future Industries on the co-development of large-scale U.S. green hydrogen production facilities across North America.

We see tremendous opportunity for mobile hydrogen fueling and believe mobile fueling will play a critical role in the build out of the hydrogen refueling ecosystem, allowing us to be flexible and capital efficient as truck network density is scaled. As of today, we have commissioned four HYLA hydrogen mobile fuelers and are working with partners for additional mobile fuelers.

Nikola Tre Hydrogen Fuel Cell Development
We are building sales momentum and backlog for the hydrogen fuel cell truck, and as of today orders for 140 hydrogen fuel cell trucks have been received from 12 end customers. We remain on track to begin hydrogen fuel cell serial production in July.

As of today, we have completed the first two of 10 gamma hydrogen fuel cell trucks. The remaining eight trucks are scheduled to be complete by the end of June. Gamma trucks will be used for customer pilots and to finalize vehicle validation. Pilot fleets include Biagi Bros, Walmart, Linde, and AJR Trucking, a leading carrier for the United States Postal Service.

Nikola Tre Battery Electric Commercialization
During the first quarter, we produced 63 Tre battery electric trucks and delivered 31 to dealers. We are beginning to see an uptick in retail sales, achieving 33 in the quarter, a significant increase from 2022. As we have sufficient inventory of the battery electric truck, we will temporarily pause production in Coolidge as we modify the assembly line to accommodate both hydrogen fuel cell and battery electric builds on the same line. After we resume production in Coolidge, the battery electric Tre will remain in our lineup as a build-to-order product.

Coolidge, Arizona Manufacturing Facility
In Coolidge, progress continued on the Phase 2 assembly hall expansion, which is on track to be completed by the end of Q2. At the end of May, we plan to pause truck production as we convert the line to accommodate both hydrogen fuel cell and battery electric trucks on the same line and will resume production in July with the first saleable hydrogen fuel cell trucks.

We also anticipate we will begin battery module and pack manufacturing in Coolidge by the end of July, and Bosch Fuel Cell Power Module assembly by December 2023.

First Quarter Financial Highlights