Nikola Issues EV Truck Recall, Halts Sales After "Thermal Incident" Probe

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by Tyler Durden
Sunday, Aug 13, 2023 - 06:15 PM

Struggling electric vehicle maker Nikola announced a recall of its battery-powered electric trucks after a third-party investigation revealed a "thermal event" was the probable cause for a June 23 truck fire at the company's Phoenix, Arizona, headquarters. Nikola previously suggested the fire was the result of 'foul play.' 

Nikola released the details about the "voluntary recall of approximately 209 Class 8 Tre battery-electric vehicles (BEVs)" late Friday evening after the US equity cash session was closed. However, there were still 30 or so minutes left in the after-hours session, and shares of the company slid 5%.

The preliminary findings showed "a coolant leak inside a single battery pack was found to be the probable cause of the truck fire at the company's headquarters in Phoenix, Ariz. on June 23, 2023," Nikola said. At the time, the company suspected foul play could have caused the fire. 

It added the findings were "further corroborated by a minor thermal incident that impacted one pack on an engineering validation truck parked at the company's Coolidge, Ariz. plant on Aug. 10." 

About 60% of the heavy-duty battery-electric trucks manufactured by the company over the last year have been recalled. This is almost every truck that was shipped to customers. These trucks are currently used by commercial freight businesses, parked at dealership lots or the company's headquarters. 

In addition to the recall with the National Highway Traffic Safety Administration, all sales of battery-electric vehicles were temporarily halted. However, the recall doesn't affect hydrogen trucks currently in production. 

Demand for Nikola vehicles has been sluggish while the company hemorrhages cash. Second-quarter results showed it lost $217.8 million, compared with a $173 million loss during the same period a year earlier. Revenues also slid to $15.4 million from $18.1 million. Shares are down 97% since peaking around $79 in June 2020

Nikola recently flagged "substantial doubts" about its ability to continue operations for the next 12 months. The company's CEO recently stepped down and was replaced by Stephen Girsky, a former General Motors executive who had been chairman of the board.

And, of course, no one can forget about this... 

Last year, Nikola founder Trevor Milton was found guilty of defrauding investors