Nikola will run out of money without new sources

The US electric truck manufacturer Nikola warns in a mandatory notification to the US Securities and Exchange Commission that it does not have enough money to survive the next quarter. In order to take countermeasures, Nikola is currently laying off employees on a large scale. However, this will probably not be enough for a turnaround.

Nikola wrote to the US Securities and Exchange Commission (SEC): “We currently estimate that our existing financial resources are only adequate to fund our forecasted operating costs and meet our obligations into, but not through, the first quarter of 2025.” In response to the worsening financial difficulties, Nikola laid off 15 per cent of its workforce in October. There are to be further redundancies this month – the extent of which has not been publicised.

All annual reports published to date reveal that Nikola is deeply in the red. In the first half of 2024, however, it looked as if the company could recover somewhat. Apparently just an interlude, as the stock market warning speaks for itself. The US portal Electrek writes that Nikola is losing around 200 million dollars per quarter and that roughly this amount was still available in liquidity reserves after the third quarter. Without new sources, the money will soon run out despite the first significant sales.

Nikola has been through a lot. A number of industry observers predicted the company’s demise a good two years ago when the former founder and CEO Trevor Milton was convicted of fraud. He had lied to shareholders about the company’s technology. The compensation amounts are still playing a role. Nikola is said to have only paid 45 million dollars as part of the 125 million dollar settlement, but has not yet recovered the 165 million dollars in compensation due to the company from the ex-CEO.

Things continued to be chaotic after that. In 2023, Nikola decided to sell its entire stake in the European joint venture with Iveco to the Italian truck manufacturer, which was tantamount to withdrawing from Europe. In the same year, Nikola had to recall all 209 battery-powered trucks it had delivered. Nevertheless, the company had already increasingly focussed on fuel cell trucks. However, Nikola never got out of the capital-intensive startup phase. In addition to the acute financial worries, the company is also said to feel legally encircled. According to Electrek, Nikola is “facing a number of lawsuits from shareholders, suppliers and partners.”

electrek.co, sec.gov, nikolamotor.com