Nikola posts its first gross profit

Nikola Corp. recorded its first-ever gross profit in the first quarter, a milestone for the electric truck maker which also recorded 134 high-incentive orders from fleets planning to operate in California.

On March 21, the startup electric truck maker began regular production of its battery-electric Class 8 Tre BEV cab. Nikola shipped 11 trucks at the end of April to dealerships to fulfill customer orders.

Forty pre-production trucks built in the first quarter are used by dealers as demonstration units. Univar Solutions concluded a 14-day trial and ordered six Tre BEVs. A pilot with Covenant Transport continues. More demos will follow, CEO Mark Russell said in a call with analysts Thursday.

For the second quarter, Nikola plans to deliver 50 to 60 trucks generating revenues of $15 to $18 million.

The first phase of the Nikola plant in Coolidge, Arizona is complete. The capacity is 2,500 trucks, although Nikola only expects 300 to 500 trucks this year. A second phase in 2023 will allow the production of 20,000 trucks over two shifts per year.

Nikola pproduction risk related to battery availability

Battery availability might limit this to the lower end of the estimate. “We’re making sure to work more closely with our supplier on manufacturing and performance,” CFO Kim Brady said on the call.

Nikola also considers microprocessor chips to be at risk, in line with other manufacturers.

All other key electrical components of the 500 trucks are secure. Parts delivery is weighted 80% from the second half of the year, when Nikola will increase from one to five builds per day.

“We continue to have full commitment from our suppliers and are confident in our ability to meet our full-year target without making revisions,” Brady said.

Electric truck manufactureruntil you lose money

Nikola (NASDAQ: NKLA) is still losing money. It won’t show significant revenue until the second quarter. But it made a gross profit of $431,000 in the first quarter from the leases of 10 mobile charging stations.

Phoenix-based Nikola lost $79.15 million, or 37 cents per share, before interest, taxes, depreciation and amortization in the first quarter. That compares to an EBITDA loss of $53.43 million, or 31 cents, in the same quarter a year ago.

The company had total cash on hand of $794 million at the end of March. Of this amount, $385 million was cash and cash equivalents and $409 million was untapped on two lines of credit with Tumim Stone Capital. Nikola plans to use all available cash-for-equity by the end of the year,

Nikola beat analysts’ high and low estimates for the quarter, according to investor site Seeking Alpha. The shares traded up 20 cents to $7.40 intraday on Thursday.

Nikola afFull order book

Nikola has orders, memorandums of understanding and letters of intent for 510 trucks, more than he plans to produce. Of these, 134 are subsidized by California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) vouchers. The program uses money collected from pollution fines to reduce the price of an electric truck by $120,000 to $150,000.

In Nikola’s case, that can mean up to half the $300,000 purchase price, although the trucks fetch more. Total Transportation Services (TTSI) received 10 HVIP vouchers which were converted into purchase orders with Nikola dealerships. TTSI has racked up over 11,000 miles in and around the ports of Los Angeles and Long Beach, California, boasting 93% availability.

“Any Class 8 availability is critical,” Russell said. “These are machines on which our customers base their business. If they don’t work, they don’t make money. We are very happy with the pilots we have run so far with TTSI and others.

“The demand is quite seismic. If you can give someone a reliable, high-performance zero-emission truck, then everyone wants one. Then it becomes a discussion of terms.

HVIP shut down the part of its voucher program that offered $150,000 per truck to people in a so-called disadvantaged community near the ports. Sixty dedicated Nikola drayage orders from seven customers received the highest value vouchers through April.

Fuel cell test

Pilot testing with Anheuser-Busch of alpha versions of the hydrogen fuel cell-powered Tre was completed in April. Nikola plans to build 19 beta versions of the fuel cell by the end of the year. TTSI, which intends to acquire a mix of 100 Tres battery and fuel cell, will test the beta version.

Beta fleet validation will run until the first half of 2023. Regular production is planned for the second half.

Nikola will work with TravelCenters of America (NASDAQ: TA) to jointly build its first hydrogen fueling station at an existing TA property in Ontario, California along Interstate 10. The station will get hydrogen from the first Nikola hub, an electrolyser using inexpensive solar energy. from the Arizona Food Service.

The Hangover by Trevor Milton

Nikola spent $14.1 million during the quarter to defend Trevor Milton, the company’s founder and former executive chairman, who resigned in September 2020. Milton will face trial in July in New York on three federal fraud charges alleging that he misled investors about the company’s technical prowess and achievements. .

Future legal costs are difficult to predict, so they are not anticipated, Brady said.

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