Nikola Issues Recall on Commercial Trucks

Photo credit: Nikola Motors

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

Big rigs come with big risks. At least if they’re made by Nikola.

On Friday, the EV player recalled most of the electrified commercial trucks it’s sent into the wild, due to a battery defect that could cause fires. Alas, this being constantly troubled Nikola, “most of” its produced fleet comprises about 200 vehicles.

What the Truck

We’d never blame a consumer for being the victim of faulty product design. On the other hand, Nikola’s long history of dodgy, occasionally criminal behavior perhaps signaled that reasonable minds should steer clear. After all, the company was founded on an “ocean of lies,” according to short-selling muckraker Hindenburg Research, which made a killing betting against the company while releasing an extensive investigative report into its many instances of corporate malfeasance.

That report eventually led to the conviction of founder Travis Mill on securities fraud charges, and ever since the company has failed to meet even its modest production goals. As usual for Nikola, the recall news couldn’t have come at a worse time:

  • In its second-quarter earnings report earlier this month, Nikola announced losses of nearly $218 million, way wider than $173 million a year ago, while revenue dropped to $15 million. Ouch.
  • After multiple failed attempts, the company also said earlier this month that it finally reached the requisite number of shareholder votes to issue more shares — which it says is necessary to raise more capital to keep its production capacity afloat.

Can’t Stand It, Know You Planned It: Originally, Nikola suggested that foul play may have led to the fiery defect. But an outside firm hired to probe the problem found that to be unlikely. As usual, it was a case of Nikola self-sabotage.

Out of Juice: The recall of 209 battery-powered commercial trucks — or roughly 60% of what it produced last year, and nearly all of the fleet it’s been able to sell — dovetails with its transition away from battery-powered EVs. Just last week, Nikola announced it was ramping down battery-vehicle production to focus on making hydrogen-cell trucks. Oh, the humanity.