Nikola (NKLA) to wean down spending, cut staff to optimize zero-emission truck production
Following a hint that this was coming during its Q1 2023 earnings report, Nikola Corporation shared a business update that includes plans for decreased cash usage and a “reorganizing” of its workforce. The EV startup is prioritizing the North American market as it looks to lean down and optimize to ensure the continued production of its zero-emissions trucks.
Nikola Corporation ($NKLA) continues to fight on as a viable business in zero-emission commercial vehicles after a bumpy past filled with deceit. Since its new executives have taken over the helm, Nikola has bounced back as a viable contender that has no intention of giving up.
We’ve seen the company restructure multiple times in the past in order to optimize, especially as it pertains to the production of its zero-emissions trucks and the batteries that power them. To cap off 2022, Nikola Corporation stumbled a bit, but there was plenty of optimism when looking ahead to this year.
Last month, the startup shared its Q1 earnings for 2023, which again relayed growing losses. As a result, the company announced a shift in its business strategy that would include a honed focus on its native North America. This move included a sale of its stake in its European joint venture with Iveco Group, equating to $35 million in cash back in addition to 20.6 million shares of stock returned.
Today, Nikola Corporation shared a progress update that includes non-essential business spending and will now include a slight cut to its current workforce.
Nikola trims fat to optimize EV and hydrogen business
Nikola shared a bullet point list of its business optimization strategy today, outlining actions previously alluded to in the aforementioned Q1 report alongside some new decisions. Current CEO Michael Lohscheller spoke:
Nikola has initiated a more focused business plan this quarter, concentrating on North America, zero-emission truck production, and our HYLA hydrogen business. Our battery-electric truck is in the marketplace and performing well for our customers, and the hydrogen fuel cell electric truck will go into production in a matter of weeks. We are proactively managing costs and reducing expenses. We are streamlining operations, including our organizational structure, to efficiently execute our objectives.
To lean down and optimize cash in hand going forward, Nikola shared it is in the process of enacting the following business actions:
- Realigning cost structure and reducing cash use by reorganizing workforce and rationalizing spend in all areas of the business.
- Concentrating on the North American marketplace, including the planned sale of the company’s joint venture share to Iveco Group.
- Localizing the supply chain where possible, including transitioning battery manufacturing from Cypress, Calif. to the Nikola plant in Coolidge, Ariz., along with planned assembly of Bosch fuel cell power modules in Coolidge. Both actions are expected to reduce material cost of the trucks.
- Prioritizing a capital-efficient approach for the HYLA hydrogen energy infrastructure business, including a strategic partnership with Voltera to develop up to 50 hydrogen stations over the next five years.
- Focusing on launching the company’s Class 8 hydrogen fuel cell electric truck in Q3, which currently has 178 sales orders from 14 end customers.
- Optimizing production at the Coolidge, Ariz. manufacturing facility to accommodate Nikola’s battery-electric and hydrogen fuel cell electric trucks on one assembly line.
- Ongoing restructuring of legacy Romeo business and shut down of legacy Cypress operations.
Notice that first one? It may not sound like much, but it’s a biggie. It’s never fun to report any layoffs, but it’s something Nikola feels it must do to optimize its business going forward. According to the company, about 150 employees assisting in Nikola’s European programs will be let go alongside another 120 employees working at the startup’s Phoenix and Coolidge sites.
The job cuts alone are expected to save Nikola over $50 million in cash spending annually, while 900 employees will remain at the company. The company states it is “supporting those affected with transition assistance.”
Due in part to the actions being taken above, Nikola Corporation expects to decrease its cash usage to under $400 million annually by 2024. All eyes will be on Nikola’s next quarterly report to see how the business is faring following this latest shift in business strategy.
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On today’s battle-ready episode of Quick Charge, it’s Elon Musk vs. the world as big players position themselves for control of enough lithium to build 600 million electric cars and the rest of the industry squares up to Tesla in the battle for market leadership.
While Windrose is making sales and expanding into new markets, the Tesla Semi is still in limited tests, Robotaxi launches as a “ride hailing service” in California with randos in the drivers’ seat and Academy Award nominated actor/noted college football analyst Timothée Chalamet teams up with Lucid to steal (even more) sales from the embattled Model S and X lines.
Today’s episode is brought to you by Retrospec, the makers of sleek, powerful e-bikes and outdoor gear built for everyday adventure. Quick Charge listeners can get 10% off their next e-bike ride through August 14 with the exclusive code ELECTREK10 only at retrospec.com.
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If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
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EV charging company ezVOLTz has partnered with Driivz, the EV software arm of Vontier, to make its “Charging as a Service” platform even smarter and more reliable for fleets, businesses, and state and local governments across the US.
If you’re not familiar with ezVOLTz, it’s a full-service EV charging provider. It handles everything, from installing hardware-agnostic chargers to managing the backend with its software platform, ezCONNECT. Now, ezVOLTz is plugging into Driivz’s charging and energy management tech to help run things even more smoothly.
With Driivz’s help, ezVOLTz plans to keep its network humming with 24/7 monitoring and real-time issue detection. Driivz’s Alert Management System can auto-fix up to 80% of charger hiccups remotely without sending a tech on-site. That means more uptime and fewer headaches for drivers and site owners.
“EV adoption is surging, and drivers and the companies and entities that serve them need smart, connected, and reliable charging options,” said ezVOLTz CEO Sam Malhotra. “The Driivz team and their smart charging and energy management solutions are a natural fit in bolstering our services.”
The partnership also gives ezVOLTz new tools to grow its network. Driivz’s software tracks usage patterns and charger performance, helping pinpoint the best spots for new installations. Driivz will also support the ezVOLTz app, letting users plan road trips and find chargers nationwide.
“Reliability and ease-of-use are two of the most important considerations for EV drivers,” said Andrew Bennett, CEO of Driivz. “We’re proud to partner with ezVOLTz in delivering seamless and reliable charging to their customers.”
As more businesses, fleets, and municipalities plug into EVs, partnerships like this one aim to make sure the charging experience keeps up.
Read more: Driivz expands in the US EV charging market with a new HQ
The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
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The Subaru BRZ may live on as an EV after all. Subaru wants its share of the sports car market, and an electric BRZ could hit the sweet spot.
Is Subaru launching an electric BRZ?
Subaru discontinued the BRZ in Europe in 2020 after the first generation. Although its twin, the Toyota GR86, was sold until the 2024 model year, the BRZ was released as a US-only model.
In its third generation, it could return as an EV. Speaking with Autocar, Subaru’s European head, David Dello Stritto, said, “Our options are open,” hinting that the BRZ could make a comeback in electric form.
Subaru’s global EV product boss, Inoue Masahiko, confirmed an electric version of the sports car “was under consideration.” He added that Subaru has extensively looked into an EV version of the BRZ with its partner, Toyota.
Masahiko explained that “We did consider electrifying the BRZ and GR86, but the win-win relationship is more important.” So far, “We can’t get the kind of benefits from both sides,” he added.
Subaru is already launching several new electric vehicles in Europe, including the new Uncharted, E-Outback (known as Trailseeker in the US), and an updated Solterra SUV.
Stritto said that an electric sports car will depend on the success of these models first, especially the Uncharted. According to Subaru’s European boss, the Japanese automaker feels “very positively about Subaru enthusiasts, but we need to see how Uncharted does first.”
As for an “electrified” powertrain, or hybrid, Masahiko said the vehicle’s packaging “would make it difficult,” adding an EV version would be “easier” to create.
The comments come after Stritto told Autocar last week that a new entry-level EV could also be in the works. However, that will also depend on how well the Uncharted sells.
For those in the US, don’t worry – Subaru is not planning to discontinue the BRZ. If it did launch as an EV, would you consider one? It would go up against the new Hyundai IONIQ 6 N and Tesla Model 3 Performance.
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