Will Nikola's best year ever be good enough?

Nikola ended a nine-day losing streak a week ago when the company reported record second-quarter revenue. CEO Steve Girsky still enthusiastically believes 2024 will be the best year in the company’s history. However, the electric truck maker only has enough cash on hand to last until year-end without further diluting investors by exchanging more shares.

Sweep away the undergrowth

Nikola is no longer talking about convicted founder Trevor Milton, who recently dropped his $1 billion lawsuit against current management. The company is still seeking repayment of a $165 million arbitration award it won against him in October. Little progress has been made in the cat-and-mouse hunt for where Milton might have parked his money.

The repair and return to owners and dealers of the fire-prone battery-powered electric trucks recalled a year ago is continuing as planned until the end of the year.

For the rest of the year, the company is focused on delivering the promised 300 to 350 fuel cell electric trucks and setting up 14 fueling stations in the U.S. and Canada to refuel them. Nikola could start building battery-powered electric trucks again next year, but only to order and not for dealer inventory.

Second-quarter production of 72 fuel cell trucks was announced weeks before the company released its earnings report last Friday. Nikola opened a modular fueling station in Santa Fe Springs, California, near I-5 on Monday, creating a triangle of hydrogen availability in Southern California.

Some plans may still change, but Nikola expects to have 14 hydrogen filling stations in operation in the US and Canada by the end of the year. (Image: Nikola)

Cash remains scarce and survival remains a question

However, Nikola still faces the risk of not surviving next year. But what else is new? The company has repeatedly embarrassed naysayers. Some facts are just plain ugly. Nikola:

Since its IPO via a special purpose acquisition company led by Girsky’s VectoIQ in June 2020, 99% of the existing shareholders’ share value has been consumed.
The current number of shares outstanding has been increased to 50.6 million from 17 million at the end of 2022, making each share less valuable to investors.
As of June 30, the company had only $256.3 million in unrestricted cash, enough to sustain the business through the end of the year without raising additional funds.
Will likely continue to pursue an agreement with Citibank to distribute $600 million at market price, which would result in further dilution of shareholder interest.

However, the second quarter results pointed to some positive aspects. Nikola:

Recorded small sales of pollution credits from the sale of zero-emission trucks.
Sales per fuel cell truck sold in Q2 were $7,000 higher than in Q1—$388,000 versus $381,000. Total Q2 revenue of $31.3 million was an increase of 318% over Q1.
Follow-up orders for fuel cell trucks have been received from two national customers, including the shipping company IMC.
More than 77 tons of hydrogen were dispensed at Hyla filling stations, avoiding approximately 867 tons of carbon dioxide emissions.

Sense of urgency

Nikola’s marketing team sent an email to prospective customers this week with the subject line “Urgent: Time is running out to secure HVIP financing before it runs out!”

The company reminded customers that California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project vouchers for 2022 model year Nikola Tre battery-electric vehicles could expire by the end of the year.

Changes to the HVIP program could cut off an important source of revenue for Nikola. The company holds 99 percent of the HVIP vouchers for fuel cell trucks and 23 percent of the BEV vouchers.

The email also noted that while there were over $261 million in HVIP funds left as of July 23, the money was quickly running out. The changes coming in 2025 will make it harder for large fleets to qualify, while small fleets could get double the incentives and save up to 90% on the cost of an FCEV.

“We go to work every day as if our lives depended on it, because they do,” Girsky told me.

TuSimple focuses on … Movies and video games

The press release could have sounded like one of those April Fools’ Day announcements. But it’s not April, and it seems like it’s true: autonomous truck developer TuSimple is getting into the film and video game business.

The company signed a partnership with Shanghai Three Body Animation to develop the first animated film and video based on the Hugo Award-winning science fiction novel series “Three Suns.”

The newly created business unit leverages TuSimple’s capabilities with a focus on generative AI applications in animations and video games.

Autonomous truck developer TuSimple will deploy its AI on<br />Use films and games. (Image: Amazon)” src=”https://s.yimg.com/ny/api/res/1.2/xmm40VpBZla2aHbFmqcvPg–/YXBwaWQ9aGlnaGxhbmRlcjt3PTQyMDtoPTYyOA–/https://media.zenfs.com/en/freightwaves_373/60288a4f8adfe8 f6d004d45a0dd2193a ” class=”caas-img-blur-background”/><br />Use films and games. (Image: Amazon)” data-src=”https://s.yimg.com/ny/api/res/1.2/xmm40VpBZla2aHbFmqcvPg–/YXBwaWQ9aGlnaGxhbmRlcjt3PTQyMDtoPTYyOA–/https://media.zenfs.com/en/freightwaves_373 /60288a4f8adfe8f6d004d45a0dd2193a” height=”413″ width=”276″/><img alt= — Autonomous truck developer TuSimple will use its AI for
Movies and games. (Image: Amazon)

“The globally acclaimed ‘Three Suns’ series provides an exceptional canvas to showcase our emerging capabilities in generative AI, which we believe will provide us with a path to commercialization in the near future,” said Cheng Lu, president and CEO of TuSimple, in a press release on Wednesday.

“We intend to partner with world-class creative talent to ensure exceptional storytelling. Our goal is to amplify human creativity, reduce development time and address the industry’s backlog of projects.”

San Diego-based TuSimple has voluntarily delisted from Nasdaq, shutting down most of the U.S. companies that once led the burgeoning autonomous truck industry. TuSimple appears to be keeping its focus on Asia.

Briefly noted…

Working horse group has postponed its second-quarter results from Wednesday to next Tuesday, a potentially grim sign for the financially troubled electric truck maker.

Mack Trucks updates its medium-duty MD series with a larger cab and improved safety features.

Volvo has been using fossil-free steel in manufacturing since 2021. A report by the International Council on Clean Transportation says the U.S. and European auto industries can do the same.

A Volvo A30G articulated dumper made of fossil-free steel. (Photo: Volvo Trucks)

Kevin Bangston takes over the position of President and CEO of Daimler Truck Financial Services North America effective September 1, succeeding Richard Howard, who is retiring.

After we introduced the first hydrogen fuel cell-powered garbage truck at the beginning of the year, Hyzon and reject bodybuilders New ways trucks conduct demos in the USA and Canada.