Yahoo Finance Nikola: Customers prefer hydrogen fuel cell trucks and we have 'first-mover' advantage
Electric and hydrogen fuel-cell powered truck maker Nikola (NKLA) is hoping a re-focusing will be good for business.
The company announced it is selling its stake in the European manufacturing joint venture it has with trucking giant Iveco Group, in exchange for $35 million cash and the return of 20.6 million shares of Nikola common stock held by Iveco. Iveco will continue to remain an “important partner and key supplier” for Nikola, and is expected to remain a meaningful stockholder moving forward.
"We are very focused on North America and the fuel cell truck, and we [will] also build up the hydrogen infrastructure - at the same time, we have taken important decisions," Nikola CEO Michael Lohscheller said in an interview with Yahoo Finance. "We have actually sold our European business to Iveco because it's in very good hands there."
Iveco will now build its European EV and fuel-cell trucking business on its own, with Nikola focusing on the North American market and its hydrogen fuel cell trucks, HYLA hydrogen ecosystem, and autonomous technologies, and software. Lohscheller said Iveco remains a long term partner for Nikola, as it will supply cabins and e-axles for Nikola's fuel-cell trucks.
Nikola also reported Q1 financial results, with top-line revenue coming in at $11.1 million, on an adjusted EBITDA loss of $169 million. The company reported an adjusted EPS loss of $0.26 a share.
Nikola said during the first quarter it produced 63 Tre battery electric trucks and delivered 31 to dealers. Nikola reported an uptick in retail sales with 33 in the quarter, and because it has sufficient inventory of the truck, it will temporarily pause production at its Coolidge, Arizona, plant in order to modify the assembly line to accommodate both hydrogen fuel cell and battery electric assembly on the same line. Nikola says as it resumes production in Coolidge, the battery electric Tre will become a “build-to-order” product.
As for the hydrogen fuel-cell powered trucks, Nikola said orders for 140 hydrogen fuel cell trucks have been received from 12 customers, and they are on track to begin hydrogen fuel cell production in July.
Lohscheller believes the future of Nikola belongs with its hydrogen fuel-cell trucks and that the company has an advantage there.
"We gave guidance this morning between 375 and 500 trucks for the total year, but we lean more towards the fuel cell truck because we get feedback from customers that they prefer the better range, the lower fuel time, and also the weight," Lohscheller said. "We also at Nikola [have] a first-mover advantage — there is nobody else out there."
Nikola also announced it completed the first two of 10 “gamma,” or preproduction, hydrogen fuel cell trucks, with the remaining eight trucks scheduled for completion by the end of June. Nikola says the Gamma trucks will be used for customer pilots and to finalize vehicle validation, with test fleet operators including Biagi Bros, Walmart, Linde, and AJR Trucking.
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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