Phoenix-based Nikola (named after Nikola Tesla, the famous inventor who’s name was already used by the popular car company Tesla) has announced that the company will decrease its 2021 production goal by 500 semis. Instead of delivering 600 battery-electric Tre semis to customers, the company now only plans to deliver 100.
These trucks will be produced in Ulm, Germany starting Q4 of this year. The company is also building a 500-acre, 1-million-square-foot facility in Buckeye Arizona.
Mark Russell, Nikola’s CEO, made the announcement last Thursday night while on a call with analysts, after the company released its latest earnings report. According to Bloomberg, Russell noted that, thanks to global parts shortages and increased demand for these components, it would be “prudent” to adjust public expectations for the Tre deliveries.
Nikola shares have struggled as of late and seen a steady decline to a close of $17.89 yesterday. This announcement follows a slew of issues the company’s had since September 2020.
Nikola’s future looked relatively bright in early summer 2020. The company went public in a reverse merger with a special-purpose acquisition company (SPAC) and stock prices soared to $93.99, even without any product or reported revenue.
But that didn’t last long. By September, one thing after another came out about the company and its founder, Trevor Milton.
That month, two women accused Milton of sexual abuse and Hindenberg Research published a scathing report that called the company “an intricate fraud built on dozens of lies.” The report was followed by a tweet from Citron Research in support of Hindenberg’s accusations. The outspoken Milton, who compared Nikola obsessively to Elon Musk’s Tesla, also resigned as executive chairman and board member at Nikola.
The company secured a major deal with General Motors in September, but in November GM reevaluated the deal and eliminated many of the terms from the first agreement. GM would no longer take an 11% stake in Nikola or make the Badger, an electric pickup truck. But GM agreed to still supply hydrogen fuel cells for the Tre semis — the same trucks Nikola decreased the production of.
Some analysts hold on to Nikola’s potential, but others say the company’s stock is “broken.” Only time will tell.