Q3 2024 Earnings Summary
- Strong customer demand and positive sales momentum, including repeat customers and growing national account adoption : Nikola has repeat customers, some of which are large fleets, and is receiving positive feedback and increasing orders. They are seeding the market with multiple fleets to accumulate data and have observed that customers "want to buy more" trucks.
- Unique offering of two zero-emission powertrains on one Class 8 platform, providing flexibility to meet diverse customer needs : Nikola is the only OEM in North America to offer both hydrogen fuel cell and battery electric powertrains on one commercial Class 8 platform, allowing them to address various use cases and customer preferences. This flexibility enables them to switch between powertrains based on customer demand, which they plan to leverage more in the future.
- Advancement in building the zero-emission ecosystem, including hydrogen infrastructure and strong interest from strategic investors : Nikola is one of the few companies with both hydrogen trucks and infrastructure, actively building the HYLA hydrogen fueling network, which connects Northern and Southern California. They are engaged in discussions with strategic partners and investors who are excited about their progress and see value in their integrated approach.
- Limited Cash Runway and Need for Additional Capital: Nikola has approximately $200 million in unrestricted cash, with a quarterly cash burn of around $145 million after normalization. This provides a cash runway of 5 to 6.5 months, sufficient to fund operations only into, but not beyond, the first quarter of 2025. The company acknowledges the need to raise additional capital to extend its runway further into 2025.
- Uncertainty in Customer Orders and Revenue Timing: The company faces challenges in predicting the timing of fuel cell truck orders, as customers may delay decisions due to the newness of the technology. This uncertainty makes it difficult to pinpoint delivery volumes within the guidance range of 300 to 350 trucks for the year, potentially impacting revenue expectations.
- Increasing Competition in Fuel Cell Truck Market: Nikola acknowledges that other companies are entering the hydrogen fuel cell truck market, which could intensify competitive pressures. While the company welcomes competition to build out the ecosystem, this could impact Nikola's market share and future sales.
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
High cash burn and the ongoing need to raise additional capital | Referenced in Q4 2023 , Q1 2024 , and Q2 2024 , focusing on cash burn reductions, cautious capital raises, and continued cost controls. | In Q3 2024 , ended with $198 million in unrestricted cash, a decline from the prior quarter; actively seeking strategic partners. | Continues to be a key focus across all periods. |
Strong customer demand and growing orders from large fleets | Q4 2023 and Q1 2024 , Q2 2024 all noted fleet orders and repeat business from major accounts. | In Q3 2024, no direct mention of new large fleet orders, although some traction with national accounts was acknowledged. | Less explicit mention in the current period. |
Supply chain constraints influencing production and delivery timelines | Q4 2023 and Q1 2024 noted constraints (especially batteries), while Q2 2024 suggested fewer issues going forward. | Not mentioned in Q3 2024. | No longer highlighted, potentially resolving. |
Reverse stock split to avoid NASDAQ delisting | Discussed in Q1 2024 to maintain listing status, not mentioned in Q4 2023 or Q2 2024. | Not mentioned in Q3 2024. | No longer mentioned after Q1 2024. |
Emphasis on offering both hydrogen fuel cell and battery electric powertrains on a single platform | Mentioned in Q4 2023 and Q1 2024 , not addressed in Q2 2024. | Re-emphasized in Q3 2024 as a unique two-powertrain strategy for Class 8 trucks. | Reappears after being absent in Q2 2024. |
Increased caution around competitive pressures in the hydrogen fuel cell market | Q2 2024 noted other entrants but remained confident. No real caution in Q1 2024 or Q4 2023. | Q3 2024 mentions welcoming competition to build the ecosystem—no cautious tone expressed. | No significant caution expressed. |
Further build-out of hydrogen fueling infrastructure | Consistent expansion in Q4 2023 , Q1 2024 , and Q2 2024 , with new stations and modular fuelers. | In Q3 2024 , over 5,900 fueling events and plans for 10 HYLA solutions by year-end; continued permitting efforts. | Remains a major driver for future growth. |
Expansion into new geographic markets beyond California | Mentioned in Q4 2023 , Q1 2024 , and Q2 2024 , including ventures into Canada and select U.S. regions. | Q3 2024 highlights traction in Canada (e.g., Loblaw, Tim Hortons) and expanding the I-5 corridor in California. | Continued expansion, especially in Canada. |
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Capital Position and Fundraising Needs
Q: Will you need to raise capital in 2025?
A: Nikola ended the quarter with approximately $198 million in unrestricted cash. With a monthly cash burn of $30 million to $40 million, they have a runway of 5 to 6.5 months. They are currently working to raise additional capital to extend their runway further into 2025. They are also implementing self-help measures like improving the cash conversion cycle and reducing discretionary spending. -
Breakeven Volumes and Unit Economics
Q: What truck volume is needed to reach breakeven EBITDA?
A: Management stated that the required volume to improve unit economics hasn't changed. Achieving scale is crucial to give supplier partners confidence to invest and optimize production lines. While they didn't specify a number, they emphasized that volume is key to reaching breakeven. -
Deliveries Outlook
Q: How are deliveries trending and what's the outlook?
A: Nikola has more potential deliveries than they're currently guiding for in Q4. Customer feedback is positive, with strong momentum and satisfaction. They plan to discuss 2025 expectations at the Q4 earnings call. -
Customer Adoption and Purchase Trends
Q: Are customers increasing orders after pilots?
A: Nikola has repeat customers, some of which are fairly large. They're seeding the market with various fleets to gather data. Pilots are necessary and can vary in duration, but there's a natural tension between sustainability goals and cost concerns within companies. -
Manufacturing Flexibility Between BEV and Fuel Cell Trucks
Q: How quickly can you adjust production between BEV and fuel cell trucks?
A: Nikola needs 3 to 6 months to adjust production due to long lead items. They have approximately 230 trucks (150 in inventory and 81 from recalls) providing optionality. They are balancing battery pack availability and managing customer demand and fueling infrastructure. -
Pricing and ASPs
Q: Why were average selling prices down?
A: The return of 20 BEVs impacted revenue figures. Nikola has maintained an ASP of about $370,000 per truck over the last several quarters. They are balancing volume versus ASP, sometimes being more forgiving on price to gain operational scale. Over time, they intend to increase ASPs and reduce bill of material costs. -
BEV Strategy
Q: Will you actively market the BEV now?
A: Nikola is experiencing a strong pull from the market for their BEVs. They are leveraging their inventory and optionality to meet market demands. They have flexibility to respond to customer interest and may adjust their strategy accordingly. -
R&D Progress and Competition
Q: How is your R&D progressing amid competition?
A: Nikola continues to improve existing products and is focusing on cost and weight reduction. They are happy that more companies are entering the hydrogen space to build out the ecosystem. They are making incremental improvements and actively working on next-generation products that will leapfrog current offerings.
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