Nikola Corp has announced its financial results for the quarter that ended December 31, in which revenue was $6.6 million, dropping from $24.2 million sequentially. The declining revenue and rising costs cut Nikola’s cash reserves as it accelerates the manufacture of zero-emission trucks.
Nikola had a net loss of $222 million in the Q4 of 2021
The company’s cash balance during the quarter was $323 million, down from $522.2 million at the end of the previous year. During the quarter, the net loss was $222 million relative to a net loss of $159.4 million in the same quarter a year before.
Management said that Nikola had improved its battery-powered electric truck. The company has commenced a series of pilots in the hydrogen fuel-cell pickup truck, expected to commence production sometime this year. Additionally, the company has added partners to the hydrogen fuel network supporting the trucks as it cuts its workforce and expenses.
CEO Michael Lohscheller told analysts in a conference call that they have taken necessary measures to impact their business positively and set Nikola for success this year.
The Arizona-based company, established in 2015, seeks to be the pioneer in hydrogen-cell electric trucks in the US. However, Nikola faces competition in the journey to produce zero- or low-emissions trucks from electric-car maker Tesla Inc. and other commercial truck producers like Paccar Inc. and Dailmer Truck North America LLC.
Nikola’s challenges are exacerbated by the fact that its former CEO and founder, Trevor Milton facing fraud charges. Milton was indicted for securities fraud. Additionally, Nikola is developing a hydrogen fuel network. The fuelling network will turn hydrogen into electricity to power its vehicles.
Nikola issued shares to enhance cash liquidity
In recent months the company has been enhancing its cash liquidity through share issuance to establish lines of credit to draw cash from this year. At the end of the quarter, the company had access to around $942.7 million in cash. In 2023 the company expects to spend $635 million.
CFO Kim Brady said that the company maintains sufficient access to cash to finance operations through 2023. However, he added that the company had been disciplined in managing and spending its money.
Expenses during the quarter dropped 25% sequentially to $149.7 million. The company postponed the planned expansion of its Phoenix assembly plant. Management said that the move would save Nikola around $345 million. In November, the company cut 7% of its workforce, and at the end of the year, it had 1,583 workers.
The company manufactured 133 battery-electric trucks last quarter and delivered 20 to dealers. The low delivery volume was due to the company’s enhancements to the model’s software and other systems before leaving the plant. The battery-electric truck will be a companion model to Nikola’s hydrogen-powered truck, which the company is prioritising. In 2023 the company plans to deliver
125 to 150 hydrogen-powered trucks, with production expected to commence later in the year. Nikola expects to deliver 250-350 battery-powered trucks in 2023.