The electric truck startup that went public via a SPAC is coming closer to commercial activity after a history of over-promising, missed deadlines and investigations into its founder for lying to investors.
In its fourth-quarter earnings report, which was released Thursday, the company highlighted a number of recent accomplishments and its plans to begin production of its electric big rigs.
The developments may be little more than cold comfort for investors after much of the value was lost on the public markets. In its Q4 digest, CEO Mark Russell wrote that the public company is working toward delivering vehicles and generating revenue.
The company, which has suffered from supply chain constraints that caused delays and investigations by securities regulators, will begin production of its electric trucks in March. Between 300 and 500 of the production ready Tre battery-electric trucks will be delivered to customers by the second quarter of 2022, according to the company.
The emphasis is on some of the progress shown in the forecast. The report puts some distance between the company's controversial founder and former CEO and chairman who was charged by the U.S. Attorney's Office for two counts of securities fraud and one count of wire fraud. The $125 million fine was part of a settlement with the Securities and Exchange Commission. In its investor update, the company said it is trying to get reimbursement from Milton.
On a day in which the stock market is suffering around the world due to Russia's invasion of Ukraine, tensions between China and Taiwan, and other issues, shares of Nikola are up more than 7%.
The company isn't constrained by its move from prototype to volume production of its electric trucks. The first hydrogen production hub in Arizona will be built by the end of the year, and two or more partners in California will be announced later this year.
Some of its more notable progress toward commercialization, including pilot testing with customers, like Total Transportation Services Inc., and securing a battery deal with Proterra, were recapped by the company.
The company said it delivered the first two Tre BEVs to TTSI in California as part of a three-month pilot program. The longest range of any BEV TTSI has tested is 204 miles, and the trucks have hauled multiple loads per day for more than 4,500 miles combined. Readers, what is your favorite non- GAAP result? MAU/DAU ratios from social media companies?
The fuel cell electric truck, the Tre FCEV, was being piloted by the company. Two FCEV alphas are undergoing a three-month pilot in the Southern California distribution network.
None of the above positive notes generated any income in 2021. The Q4 and full-year report is a sea of red ink.
There was no revenue in the fourth quarter of the year. It had no top line or operating expenses. The company's full-year operating loss was $162 million.
The result was worse than the operating loss of the year. The company's pace of expense growth is greater than it appears from its face-value operating losses, and the rising expense base is having a material impact on its profitability.
This is what the market anticipated. The ramp-up mode that Nikola is in means that its expenses are rising, its revenues are expected to go up, and it has potential profits in the future. The company's losses may continue to grow, but with the delivery of its first production trucks, revenue should begin to flow into the company.
There was good news in the company's earnings report that it lost less money than anticipated. The adjusted net loss per share was just $0.23 in the quarter, largely the result of removing share-based compensation expenses and the financial impact of regulatory expenses from its cost mix. The fourth quarter loss was expected to be adjusted for. The company's commercial progress could be construed as encouraging.
The company has zero revenues, rising expenses, and payments related to its settlement with the SEC. Its ability to sell trucks at volume is uncertain. As of the time of writing, investors value him at $3 billion. That's a pretty big bet that the company's trucks will roll and that profits will follow.
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