05.10.23
Nikola reported Q1, 2023 earnings.
Nikola delivered:
- 48 trucks in Q2, 2022 out of 50 produced,
- 63 in Q3 while producing 75,
- 20 in Q4 while producing 133,
- 33 in Q1, 2023 out of 63 produced.
This is a very "interesting" situation where Nikola has 152 Inventory, 20% more than sold in all of 2022 and x5 of Q1 deliveries.
The company stated in its last Earnings they are focused on improving the truck based on customer feedback, whatever that means. Now they say they are going to pull out of Europe entirely, pull out of the Iveco Joint venture, no surprise there, and Focus on the North American market while emphasizing on Hydrogen, moving away from BEV, electric drive.
These numbers tell a gloomy, not surprising, probably, end of the road for Nikola:
Nikola reported disappointing, but not surprising, $11.1m revenue on 33 trucks sold in Q1.
This might indicate a Nikola Tre Average Sale price of around $336k each. Obviously, this is way higher than Q1, 2022, since they have not sold any trucks yet. It is slightly higher than the 20 trucks sold in Q4, but half of Q3, 2022. Nikola lost $169m in Q1, 2023 leaving them with only $121m cash and $85m restricted cash, not enough to get through 1 more quarter without financing at the worst time in recent history to collect funding, to the least promising company around.
To those who follow, Nikola was previously led by a Class A fraudster Trevor Milton who was recently found guilty of Wire and Securities fraud.
Since Milton was removed in 2020, after these practices were publicly exposed, Mark Russell the Board president replaced him (hard to argue he had no idea what was going on).
In January 2023, Russel retired and was replaced by retired Opel CEO and current Nikola Board president Michael Lohscheller.
Michael Lohscheller was Opel CEO from 2017-2021, 6-month CEO of Vinfast till Dec 2021, nominated to Nikola Board in Feb 2022.
Nikola has been trying to collaborate with many OEM companies along the way, like GM, Ryder, Republic, BP, and more, but all dropped ties, either right away after being called out and faced with reality, or after failed co-operations.
The latest breakup, fresh off the press, is "Iveco", the main partner/Supplier of the Nikola Tre, who just bought out their share of the Nikola-Iveco European Joint venture.
Iveco will still sell Nikola, on demand.
Nikola was known for making renderings and fake models of cool Trucks and cars, pumping the stock, and promising things they never had the capability to develop or make, like the hydrogen semi-truck, the EV pickup, hydrogen network and technology, and more.
After dropping or "putting on hold" all these fake projects, Nikola moved on to assemble, an Electric Semi truck from available OEM hardware "off the shelf" and sell it for nearly $350k a unit, mostly counting on huge California and other states incentives, as well as federal incentives, to reduce the price for customers and make the purchase reasonable.
These incentives could reach and exceed $200k and make the Nikola TRE Semi EV almost comparable in price to a Diesel Semi, which is around $150k.
However, these incentives are very limited in number, and approval process. It was never seen to be a sustainable, scalable business model, I guess now Iveco sees that to and wants out of the risky model, although, they would not mind at all selling as many Iveco S-Way models to Nikola with some minor cosmetic changes and excluding motor and transmission.
Company guidance for 2023 - given last quarter, was 250-350 produced and sold, $140-200m revenue, However, this can't be an exciting sign since they already had 127 trucks in inventory at year start. Nikola chose not to update 2023 guidance and provided confusing, vague figures for this and the next quarters.
Based on this guidance they could possibly produce in 2023 less than in 2022...
Which ended up with 258 produced, and 131 Sold, since it began deliveries in April. I doubt they will even come close.
The company also announced shutting down BEV Tre production to fit it also for future Hydrogen FCEV Tre. I find it weird, since they don't really have assembly lines, they retrofit these trucks pretty much manually.
Back in May 2022, Nikola's production and delivery guidance for 2022 was 300-500 (they got pretty close on the low end with production, but nowhere near in deliveries).
Although, Nikola 2023 expectations are high with 125 Hydrogen trucks in Q4, and other hydrogen stations and network plans, I just can't see this model of Assembling other OEM components, selling at a very high price, with Hope for 50%+ incentives, a viable model.
Although Tesla already began Their Semi truck deliveries to one Customer, reportedly only 36 units, there are many unknowns about exact specs and pricing.
Nikola TRE is not in competition with the assumed/ currently known Tesla Semi specs, but the pricing once announced could seal the deal and end Nikola.
If Tesla Semi would be sold for less than $250k which is very likely, or even $300k, and ramp up production as planned in 2024 to the Tens of Thousands, I find the Nikola TRE to be obsolete.
Can Nikola succeed in their originally intended FCEV/Hydrogen trucks (after they switched plans overnight in 2016 from natural gas), I doubt that either.
Hydrogen requires an expensive logistical distribution network (Similar to Fuel, which I predict its demise within a decade).
Hydrogen is currently expensive to produce, which could only be reduced if massively produced. It is very inefficient compared to EVs and even to diesel.
Given all that and the compelling Semi EV by Tesla and other OEMs, I don't see the FCEV succeeding in the Truck or car segments, maybe Ships, trains, or Custom heavy equipment.
Nkla stock is down today to ATL of $0.80, down 92% from 2020 SPAC of $10, and down nearly 99% from the $66 hyped stock price in 2020.
It seems to me, Nikola will declare bankruptcy very soon.
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