Nikola Corporation Reports First Quarter 2023 Results

Published May 9, 2023

Reprioritizing and refocusing the company on North America, hydrogen fuel cell electric truck, HYLA hydrogen refueling business, and autonomous technologies
Orders received from 12 customers for 140 Nikola hydrogen fuel cell electric trucks
In May, executed joint development agreement with Voltera to develop up to 50 HYLA hydrogen refueling stations
Reported GAAP net loss per share of $0.31 and non-GAAP net loss per share of $0.26 for Q1 2023
Realigning cost structure with new business focus, reducing spend and cash burn
Substantial gross margin improvement from Q4 2022 to Q1 2023
Building sales momentum with 31 wholesale deliveries to dealers and 33 retail sales from dealers to end customers

PHOENIX – May 9, 2023 — Nikola Corporation (Nasdaq: NKLA), a global leader in zero-emissions transportation solutions, today reported financial results and business updates for the quarter ended March 31, 2023.

“Nikola had a very solid quarter, building sales momentum with Class 8 battery electric truck deliveries to customers, and orders for 140 hydrogen fuel cell trucks from customers,” said Nikola CEO Michael Lohscheller. “We have the right products at the right time, and as we move forward, we will be focusing on the North American market, hydrogen fuel cell trucks, the HYLA hydrogen refueling business, and autonomous technologies.”

“We are on the right path with our re-energized management and commercial teams, improved sales strategy, new dealers, and energy partners,” Lohscheller continued.

Strategic Refocus on Nikola’s Core Business
We have reprioritized the business, focusing on the North American market, hydrogen fuel cell trucks, HYLA hydrogen ecosystem, and autonomous technologies, vehicle controls, and software. Manufacturing and energy are capital intensive businesses, and we need to remain focused where we have competitive and first mover advantages. As such, we are selling our stake in the European manufacturing joint venture to Iveco Group in exchange for $35 million cash consideration and 20.6 million shares of Nikola common stock that will be returned to us by Iveco. Iveco will remain an important partner and key supplier for us and will cheer for our long-term success, and they are expected to remain a meaningful stockholder moving forward.

The U.S. is the leader in energy transition with federal incentives such as the Inflation Reduction Act and strong truck and infrastructure incentive programs in states including California, New York, New Jersey, Colorado, and Washington. From a policy perspective, many states have been introducing strong regulations mandating zero-emissions vehicles. For example, in California, per the California Air Resources Board (CARB) Advanced Clean Fleets regulation summary, beginning January 1, 2024, only zero-emission drayage trucks may register in the CARB Online System. All drayage trucks entering seaports and intermodal railyards would be required to be zero-emission by 2035.

We are a one-stop solution for fleets to achieve compliance with regulatory requirements and take advantage of state and federal incentives, with battery electric trucks available immediately and hydrogen fuel cell trucks available later this year. By focusing on what we do best, Nikola has a first-mover advantage and can capture a sizeable share of the commercial trucking market, while also building out a hydrogen energy business capable of long-term growth.

Energy Business Progress
On May 2, 2023, we announced the execution of a joint development agreement with Voltera Power, backed by EQT. As part of the agreement, Voltera intends to supply the capital for up to 50 HYLA hydrogen refueling stations over the next five years. Our strategic partnership with Voltera is further validation of our capital light strategy and interest from financial partners to participate in the build out of our hydrogen refueling ecosystem.

We have made significant progress on PHH, receiving unanimous approval from the City of Buckeye City Council on our general plan amendment and rezoning application. We are ordering long lead-time equipment and continue to work on completing Phase 2 of the Department of Energy Loan Program Office application process. We also continue to work closely with Fortescue Future Industries on the co-development of large-scale U.S. green hydrogen production facilities across North America.

We see tremendous opportunity for mobile hydrogen fueling and believe mobile fueling will play a critical role in the build out of the hydrogen refueling ecosystem, allowing us to be flexible and capital efficient as truck network density is scaled. As of today, we have commissioned four HYLA hydrogen mobile fuelers and are working with partners for additional mobile fuelers.

Nikola Tre Hydrogen Fuel Cell Development
We are building sales momentum and backlog for the hydrogen fuel cell truck, and as of today orders for 140 hydrogen fuel cell trucks have been received from 12 end customers. We remain on track to begin hydrogen fuel cell serial production in July.

As of today, we have completed the first two of 10 gamma hydrogen fuel cell trucks. The remaining eight trucks are scheduled to be complete by the end of June. Gamma trucks will be used for customer pilots and to finalize vehicle validation. Pilot fleets include Biagi Bros, Walmart, Linde, and AJR Trucking, a leading carrier for the United States Postal Service.

Nikola Tre Battery Electric Commercialization
During the first quarter, we produced 63 Tre battery electric trucks and delivered 31 to dealers. We are beginning to see an uptick in retail sales, achieving 33 in the quarter, a significant increase from 2022. As we have sufficient inventory of the battery electric truck, we will temporarily pause production in Coolidge as we modify the assembly line to accommodate both hydrogen fuel cell and battery electric builds on the same line. After we resume production in Coolidge, the battery electric Tre will remain in our lineup as a build-to-order product.

Coolidge, Arizona Manufacturing Facility
In Coolidge, progress continued on the Phase 2 assembly hall expansion, which is on track to be completed by the end of Q2. At the end of May, we plan to pause truck production as we convert the line to accommodate both hydrogen fuel cell and battery electric trucks on the same line and will resume production in July with the first saleable hydrogen fuel cell trucks.

We also anticipate we will begin battery module and pack manufacturing in Coolidge by the end of July, and Bosch Fuel Cell Power Module assembly by December 2023.

First Quarter Financial Highlights

Webcast and Conference Call Information
Nikola will host a webcast to discuss its first-quarter results and business progress at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time) on May 9, 2023. To access the webcast, parties in the United States should follow this link: https://www.webcast-eqs.com/register/nikola20230509/en.

The live audio webcast, along with supplemental information, will be accessible on the Company’s Investor Relations website at https://nikolamotor.com/investors/news?active=events. A recording of the webcast will also be available following the earnings call.

About Nikola Corporation
Nikola Corporation is globally transforming the transportation industry. As a designer and manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen station infrastructure, via the HYLA brand, Nikola is driven to revolutionize the economic and environmental impact of commerce as we know it today. Founded in 2015, Nikola Corporation is headquartered in Phoenix, Arizona. For more information visit our website or Twitter @nikolamotor.

Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of federal securities laws with respect to Nikola Corporation (the “Company”), including statements relating to the Company’s future performance and milestones; expectations related to manufacturing facility expansion, truck manufacturing schedule and truck delivery; expected benefits and production plans of HYLA mobile fueler; expectations relating to battery module and pack manufacturing; expected orders and deliveries of trucks and the timing thereof; our belief that we have best-in-class products, and the first production BEVs and FCEVs available for purchase; our belief that we have the competitive and first mover advantage; the Company’s business outlook; and terms and potential benefits of planned and actual collaborations with strategic partners. These forward-looking statements generally are identified by words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” and similar expressions. Forward-looking statements are predictions, projections, and other statements about future events based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: design and manufacturing changes and delays, including global shortages in parts and materials; general economic, financial, legal, regulatory, political and business conditions and changes in domestic and foreign markets; the effects of inflation and COVID-19; the outcome of legal, regulatory and judicial proceedings to which the Company or Romeo Power, Inc. (“Romeo”) is, or may become a party to; demand for and customer acceptance of the Company’s trucks; the results of customer pilot testing; the execution and terms of definitive agreements; the failure to convert LOIs or MOUs into binding orders; the cancellation of orders; risks associated with development and testing of fuel cell power modules and hydrogen storage systems; risks related to the rollout of the Company’s business and milestones and the timing of expected business milestones; the effects of competition on the Company’s business; the availability of and need for capital; the approval by stockholders of an increase in the Company’s authorized common stock; the Company’s ability to achieve cost reductions and decrease its cash usage; customer demand for the Company’s trucks; the grant and continued applicability of federal and state incentives; and the factors, risks and uncertainties regarding the Company’s business described in the “Risk Factors” section of the Company’s annual report on Form 10-K for the year ended December 31, 2022 filed with the SEC, in addition to the Company’s subsequent filings with the SEC. These filings identify and address other important risks and uncertainties that could cause the Company’s actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Use of Non-GAAP Financial Measures
This press release references Adjusted EBITDA and non-GAAP net loss per share, basic and diluted, all of which are non-GAAP financial measures and are presented as supplemental measures of the Company’s performance. The Company defines Adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization, stock-based compensation expense, and certain other items determined by the Company. Non-GAAP net loss is defined as net loss adjusted for stock-based compensation expense and certain other items determined by the Company. Non-GAAP net loss per share basic and diluted is defined as non-GAAP net loss divided by weighted average basic and diluted shares outstanding. These non-GAAP measures are not substitutes for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles in the United States (GAAP) and should not be considered as an alternative to any other performance measures derived in accordance with GAAP.

The Company believes that presenting these non-GAAP measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.

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