Nikola (NKLA) 4 Aug 232023 Q2 Earnings call transcript

Thank you, Dylan and good morning, everyone. Again, welcome to our Second Quarter Earnings Call.

Before we get into earnings, I would like to first address the leadership transition plan announced earlier this morning. Steven Girsky, Chairman of Nikola's Board of Directors, will succeed me as CEO effective immediately. I have decided to step down due to a family health matter and will be returning to Europe. transition, through remain to the and team. seamless an Nikola support a the capacity advisory end ensure I at will in Steve To of September my are appointing The confident and I Steve board as successor. in

Steve was in has pivotal been and the success. Nikola company's and to early an believer investor

to the closely ground and capitalize Steve enable required in Nikola team the of business speed products forward the on in will on running the exciting intimate advancing front the years, with His of Over Nikola champion seeing to CEO. knowledge have us. opportunities true a his of Steve the hit as new impact him to with I is he will has worked Nikola's role management corporate initiatives. mission, and look

began position quarterly think the continue and Nikola's and to fuel deal, last align call out our the hydrogen America. build Nikola our laid the fuel also North best sharing we commercial that hydrogen emission into and results, the with company is are quarter's accelerate you Going Deliver the was. to transition economy. real provide I truck zero lead on that momentum to focus. refuelling we Focus heavy-duty enable cell operations, forward the sales solutions truck first hydrogen optimize in cell spending path market, to with what I

on path laid we the solidly out on are we that our delivering share commitments. I Today and

Bayotech supply Volterra largest doing us J.B. firms, solutions. supplier business world, Fortescue as news in fueling companies for trucking automotive the stations, hydrogen in Industries, U.S. one energy seen largest and Future the of Hunt, You the have leader with for global Bosch, and such the

Nikola, commercial is this along mission employee I us a forward and who every journey. to possible We at is am we that decarbonize our with continue have of proud and transportation. assembled in each This heavy-duty great team with only driving on

expected, make and be is we the never but world-changing technology, to the true people, have to a smooth. the When the Bumps Nikola are a road HYLA, pioneer, plan partners, we you are company. believe the and

get let's started. So

the to first with fuel production time these upgraded Beginning July cell trucks build are more programs, truck started line. the built XX. of mix as hydrogen The on take the the truck serial assembly ones initial model newly on we

As we build they increase. off and will come more trucks, line the will throughput faster

first to September. in the expect We happen customer deliveries

potential drive the Helping sales fuel customers. tests cell of are and with truck hydrogen pilot current

validation of will received used During have used QX, be we Eight truck completed in and we two the trucks. is hydrogen cell in fuel will trucks. in XXX Gamma testing. final be the for orders dealers trucks more To than testing, our Interest and XX pilot customer date, encouraging. XX electric

the as cost the sales, completing increasing the of of electric completing government growing trucks sales retail is total the and the are we wholesale zero and participate customers On second product building XX discover the continued that truck in incentives willingness deliveries. QX, and regulations is momentum, benefits is The daily market introduced. The de-risked the to XX trucks technology of emissions additional and battery quarter, fleets electric during proven. transition ownership vehicles of to double is for battery as

ended site and The reduced our QX last trucks XX inventory. electric on XX inventory quarter our trucks wholesales to We dealers. XXX dealers in with battery at

producing of early plan in trucks to inventory start electric XXXX reduction basis. QX significant battery a in on build-to-order a again expect We and

sales energy ahead have ensure business Nikola Moving fully XXXX that integrated is with truck to the enable progress customers we is in to of believe our be on offered we and to We customers seeking providing is energy solution emissions for operations to fuel what believe and company needs today. our made XXXX. HYLA, only zero that a for we working trucking fueling solutions supply and truck. late required business; customers the substantial to in The cell mobility

equipment. takes ahead procure with the continue Hydrogen we long dispensing to infrastructure to are believe requires ecosystem. partners to a will We of out time lead curve permit, and build well to the and production and work build time

Our with continues progress to partners. capitalized well-established energy team and

The reduce received construction meaningfully California expect developed joint eight have development the partnership I various progressing the to another lower stations. from with first is determined under station boost station California to costs. it million grants eight costs stations $XX locations with over well agencies, the capital announcement for plan the The will development and These Volterra the of and for we station partnership. of dispensing refueling grants supporting be hydrogen

and We the support regulatory state us who partnership agencies to of appreciative alongside working are energy California the with transition. are very

our through hydrogen molecule of we Fortescue FFI a the Phoenix with supply the announced production with Industries On acquire of XXX% the help agreement definitive strategy and the controlling hub to of the with reached that side, hydrogen partners. Future project. The with was aligns ecosystem agreement hydrogen

project The made progress. good has

expect with We X of and decisions production the fuel to it a Phase QX end XXXX of capacity to XXX Nikola be hydrogen to cell XX could trucks. up investment up day, reach tons to operational by per support metric anticipate final which in XXXX

FFI off-take support We agreement needs. are to our hydrogen negotiating a with

infrastructure are milestones partnerships capital light The to hydrogen our FFI strategy. and significant support Volterra

Power, We North closely working and Plug and partners strategy. underpin supply such American with as to Biotech Linde infrastructure our continue

available locations advantage mobile strategy end have are our continue as execute have have mover infrastructure and hydrogen at today, received to year. we provide plan mobile receive of fuelers updates believe over first six plan. customers today, we on a We as XX secured As fuelers of next track we to more the and several we XXXX. have will of on to -- nine business received by We the California for

to financials, I turn things I to want Stacy over a call to few over Before the go safety. about say

our at battery truck headquarters about talk in June. the Let's electric late our fire of

that First was are of thankful all, we no hurt. one

fire only the the four. started that to other been one and truck has spread it Secondly, determined

We are will want we we share third have and conducted safety everyone investigations more. when to with with to tested We and rear crash trucks as one our ongoing, by battery being leakage Nikola's prior safety know and and battery party staff are first These rigorously testing, side more monitoring two and release. one runaway technical and include coolant designed a the front, know tests detection. thermal priority

as vehicle of and industry Laboratories. for Our and the trucks the meet exceed Technical Automobile Standardization motor Nations International United the standards and federal standards best as Organization XX practices Regulations Underwriters Society meet including the Global Engineers, well safety

electric on just cell truck. the we testing The described also was conducted fuel

fire system systems to further than testing validation but which the penetration pioneer safety the gunfire of Extreme rigorous high more XX the duty rate undergo including underwent truck than cell testing the driving for XX,XXX hydraulic collision. only hydrogen puncture and to the similar on of a of simulate testing electric truck temperature fuel fueling. cycles, itself, vehicle years heavy hydrogen Nikola and Additionally, the is simulates standards Not tanks more testing, vehicles.

States. standards We have it's part be staff to a team hydrogen the the members in on used going who for United been of how and have establishing

the incredibly This record to profitability. So emissions. Nikola the long ever we summer way innovative accomplished those together ensure and What lead looking important. is to do accomplish Nikola partners milestones to to is our companies transportation hottest must and transition zero heavy of and duty work is on on to our to things for we what and previously around some have is going we to we are execute communicated of are already haul. all believe that shared Today we well Nikola

XXX a as and produce transition is you Class XX% per A tons journey truck for just metric this COX avoid zero part tons Nikola trucks internal we accomplish registered being transportation emissions. combustion make on once critical the semi-truck in up a sector. together. Thank emissions about States, in of the for year. in one engine road the of strive to opportunity with a to year. our more That XXX we to is a massive United metric role X% of yet COX mission play than all Nikola again of can vehicles expect of a There the Replacing million

share refocus to burn Now cash yours. are the our is floor I'd Stacy. with to how like we Stacy, it She will business. you reducing pass our as we off

Thank you, everyone. good morning, Michael and

by and continuing value the momentum. delivering on million. shareholders market our on American to turning financial market, health. remain to our look mover focusing economy on balance QX advantage sales We sheet unrestricted substantially we on we our at improving our burn while our by position got cash results, really corner the the our -- in next strategic the are As We first by and a phase hydrogen achieving and North our North business focusing cash improving also increasing $XXX of American our and build priorities focused

below production and structure This strategic We in that quarter European the at JV Coolidge is in head of our million $XXX by rationalization with our Nikola difficult burn decisions to Phoenix we of through completed down dollar count our Those a times ensure actions cost priorities. sale target. reduce Iveco executed XX%, spending every battery Romeo, and Nikola's company's operations to helped new company-wide with reduced than to to and effort spent many cash more cost priorities. line went accomplish the align make closed while

financially work disciplined and finding to diligently driving opportunities to our continues team optimize Our cost making. structure decision

momentum a quarter visibility to the capital continuing reduce we CapEx burn believe rates of build by through $XXX inventory usage combination by this balance we to result sheet. per end run a sales ongoing our a on of high cash As managing year million and have reducing and OpEx lowering working and below

are incentives. sold of XXXX rebates revenue and after at we $XX.X truck QX, were XX gross of rebates ASPs trucks they're and for than being million executed revenue which million to higher dealer $X.X Dealer of million retailed in net XXXX. In battery for wholesales, electric $XX related truck

XXXX by wholesales been stabilizing, retailed As and activity come have our rebate to most down. we are of levels expect pricing now

Despite the XXX% improved in improvements model. Gross the XXX% transitioned costs and we negative manufacturing quarter are resources as per as margin coolage we inventory built-to-order overhead improvements and rebate optimized see electric have and to QX. Excluding lower for margin battery negative higher unit operations dealer $XXX,XXX in freight in inbound a we and rebates, as labor sales was attributable unchanged continue from from impact to price this revenue coming QX. gross and truck revenue, have to average QX in the approximately

continue expect start seeing as and specifically Coolidge on a manufactured on enclosure electric battery improvements of and costs, materials packs bill utilizing cells. in optimize pack gross battery We battery truck we battery to margin the

begin we anticipate first states as cell on and high advantage we Coolidge the in savings freight we labor a benefit in the assembling term, California mover incentives gross fuel later to sales the cell due average margin and this to year. and overhead longer truck once the higher be modules In fuel price power superior from like

On ample localize both expenses trucks and break-even. be volumes will material we critical at cost our we gross it our guidance into something chain. have QX in bill Operating achieving is of million supply and within reductions team opportunities XXXX $XXX range. to be focused This came the heading on margin in will laser scale as for provided

Most and $XXX.X During burn improvements in was floor better our capital stronger we target. in working solutions, investment from financing model, improvement of further the came anticipate the production a QX sales cash than built-to-order capital momentum, usage. million utilization. down CapEx and working With quarter, plan $XXX slowing million

from be neutral fuel XXXX to the for working capital cell BEV as half inventory to volumes. existing for is sales scale needed of second up goal the Our proceeds offset impact the capital working

and ATM July of note, Hub QX end phase Phoenix the we QX. not conditions, increase cash from by sale the market in million proceeds our improved cash from million increase is of and FFI. cash of the offering million follow-on Hydrogen came The first received of net net balance $XX.X approximately $XXX.X proceeds, divestiture. from million to at include April, This in raised an capital volatile $XX the the does Coolidge JV proceeds acquisition land leaseback $XX $XX Despite in completed QX. in from million additional million $XX from we The from and the million convertible position $XX.X

adequate of cash access to As July, XXXX. maintained approximately to the beginning capital $XXX us the million balance into of of sheet and we have we on sustain total believe

variables strategically common fund at the to our will Meeting, approved the yesterday, we continue of Proposal shares number and As to our Annual of our allow X and our to stockholders efficiently availability other authorized course. execute markets increasing capital conditions, maintain of stock and accessing us stock. of This business capital, subject plan, announced price, market and liquidity

reduced fully and that by achieve and the plan lower approximately substantially have estimate of we cash capital to being As our end need of will redefined than we neutral additional anticipate is our profitability. model estimated. business EBITDA previously burn was business and $XXX million we XXXX currently This fund the what

Total to for the XXX% third margin expect $XX we the on $XX for deliveries trucks XXX%. quarter are a first a net and XXXX levels. for expected is revenue negative to guidance; to to total be including to million, the Moving of generating XX negative between of of $XX.X million XX be of quarter, the more compensation. in operating to million truck of half gross trucks stock-based truck expenses million the $XX versus than This $XXX range XX% reduction million,

to million. million CapEx expected be QX to $XX is $XX

in million in coming with below million. a line to have cash of already burn further $XX $XXX We reduce roughly burn QX July cash to sight

guidance year as savings as into now cost have as We are the realigned on commercial updating well from we the structure. better full visibility side XXXX our the

For to negative total of we XXX trucks $XXX to the negative margin revenue XXX% expect gross full to XX%. million, XXX deliver year, of generating to trucks $XXX for million

expect moving Operating including expenses full forward. stock-based compensation. to operating We range of XX% $XXX expected year in reduction the million the now in for million of are a realize $XXX million $XX.X to expenses

had To results, strong improved our and strengthening we our financial sheet. a balance up wrap have quarter

clear access executed the unrestricted bid reduced of to positive initiative, burn fund to developed to of EBITDA, substantially ability have savings business demonstration requirements our almost We our cash cash capital compliance the capital. closing doubling cost continued with while NASDAQ, our a position, price regained and on understanding

less. want thank ability Nikola team an I executing, for to entire sincerely efficient, with and do creative, the demonstrating being more to

turn far, with much the business. we're so is to and we're there profitable a working Nikola our and still goals achieve you into While to pleased diligently we accomplish results assure

Michael closing to will remarks. back I now pass for it

Stacy. you, Thank

during So Nikola. as you have heard things we at are doing call, the the right

substantially our burn. reducing increased position, also while have cash We our cash

the building We are zero transition and we the And momentum refueling with to business hydrogen are in commercial progress advancing sales transportation. emissions partners. making

As QX following the this team. we forward will the expect second year, to see Nikola from half look investors we and the of

fuel have ensuring cell sales momentum; operations. building to the we First, solutions truck second, fueling customer support

to our continue burn. Third, cash on raise plan. and adequate capital to reduce business Fourth, execute

honor it to served Before has been we privilege close, CEO. say I as to a just Nikola's that want have and

with to in a a what and to purpose with company's he now, for record pave of zero the been As my the is be right I has belief Nikola emissions step never way a Steve away phase this proven family, executive future my next Nikola's history. exactly needs stronger. is track entering seasoned automotive

you a over say few the history. you you Steve, words. would if Steve, of over to like to to company's

speak I'm his company. what together behalf want entire us. Michael. Nikola excited zero on well. for board on a in feel I've would to world this look Michael to advancing your their I and and for Thanks thank team I me take company's trust in and Michael toward Nikola's touch this and to over to the opportunities and family about and ready you mission known to dedication the and pioneer with thank to emissions worked family capacities for a in role We've hard cannot ahead the many I and momentum. forward to decade. in I I as solutions also energized continuing work the overstate his wishing we like you has many work of staying for placing contributed Michael of

our open analyst remarks. please Operator, for line questions. concludes That the

Shlisky Our DA with from proceed. instructions] Mike Please Davidson. [Operator is question first

the you I here? term And just Steve, search maybe you a well. Michael, your also external sudden as it's looking they thanks was Yes, a hi, when and temporary when there I only to and just chairperson, to and thing? last for wish you very board family sometimes taking question. again stay kind a my Did that morning done can into transition they of the my about role I'm long want for large Nikola folks or sometimes question. talk do good first Steve were CEO thing. was night at tell this call us to come

Mike. thanks So,

and here. it closing be to be Does A board up and spending for on plans going a time, to it plan long customers happy in I'm all had help? well-functioning plan the succession tomorrow. move a that I lot scenarios and partners. to of I'm we lot I'm long We're place role. haul, to win. So, on to I Phoenix. for one it succession win time a and as for the into road this step this takes and a as visiting was had though in here

certainly I to the second coming production Sure. that. the line. turn No, appreciate to want off in I half here what's

going cell queued make up reading here. it the need? And them? they lease for trucks one the the have to technician I'm to confirm off looks program you half that the least in coming Let's at but line bundled be the then year like know I this those back of have fuel that entirely the attached to those year, it's vehicles if plan fuel here what's will hydrogen have everything all vehicles all correctly sure

And is here. Michael Yeah, thanks this Mike.

Let me this. take

have obviously a of all, the terms for week production, this milestone cell So, the in production we important fuel first started company. as of the very of said, we the so truck,

terms you a trucks line, very on also one the thing correct. have which interesting assembly We in But of produce are flexibility to is both efficiency.

cell we produce fuel year, to this plan For truck.

end XXX next couple order But then as produce a also trucks, it's we truck. of all obviously in the than cell going we we with will months is forward. build the year, the produce the electric terms BEV concept, good first of very I the to will of of And think about However, said, which we the now to launch fuel step more product. think the trucks

the various strategy, elements obviously a of terms go-to-market play In factor. key

Just to that. finish

the the And this one first customers by customers. plays all, fueler, availability So, a lease several case, terms everybody. not that of bundled will as want well. It well. approach is for But go-to-market there's obviously hydrogen yes, case very mobile but of as But we offer too. in important role the by depends

embedded answer, lower the just is. the And a in guidance quarter guess lower That's simply might be versus third for maybe or that why clarify $XXX,XXX to your ASP ASP it the last quarter. It's will I different there explain of $XXX,XXX all FCEV. a for

Okay.

In terms truck obviously, incentives of an have some ASP. higher, done is is inventory the impact the on had because But the the fuel that ASP, ASP similar, think about we cell but the it's in higher. general, please very the for also price that are higher liquidation now and

So, there cell truck. between is the a significant and fuel difference BEV

on competition clearly In that, battery uniquely have where have addition advantage the truck, obviously, first a electric fuel to the cell positioned. we mover we truck, are on and

hope I that So, clarifies it.

this is Stasy. And

just jump in. Let me

ASP $XXX,XXX inventory, BEV, existing And the selling we how forward, as in will for ASP kind Michael seeing through think the going to guidance the be $XXX,XXX ourselves we're fuel about range. settling to, the as to alluded about we're $XXX,XXX First, range. for of cell, normalize $XXX,XXX and

Thank sense. it I'll makes appreciate along. That you. Okay. I pass that.

Our with Jeff next is Please Vertical question from Partners. proceed. Research Kauffman

Thank you very much.

forward. Steve, looking much endeavors. to with best your Michael, you of are And your and luck all, I'm on with forward thoughts of very family going First working

cell a seeking by end just was we'll comment more. to be XXXX. a talk to I that is and about in point neutral And thinking around the be I'm of that of I amount the there's to more go at want back of fuel going a be lot EBITDA and congratulations to country whole So, is fair time. moving to going this sure Stasy's fuel also HILO mix

sales, that how fuel the kind moving truck and cost looking So, trucks the operating you're we cell breakeven? of given around can many looking kind What next to looking reductions we're of you give us breakeven and at over Not at? are of what but an of be fuel an about fuel at two we cell idea annual that around years? kind country the be thinking how do need much break-even population to

Yeah, great question.

And the is the activity, about able about talked be given will would to obviously, of determined that expect produce and of be those we're to cell. so, trucks. we order the site, from that the truck we're fuel time need momentum really, X,XXX be of and on seeing to fuel the the customer. But what we mix will trucks volume Most last kind by cell the seeing early most come sell

think the fuel with going sell, a each XX,XXX ramp revenue; to about each the think cell little XX,XXX to year a that you for operation. revenue time you for I somewhere between think If bringing truck that, to will truck So, take fuel you right? bit about if [ph] and be of up, hydrogen of in you're

XX% to about that truck revenue. So, about on fuel it's going on in hydrogen. there up And time that to to cell target at XXXX, ramp margin the is bringing take look then, and the XX% XX% really, we if margin

then, I fuel be of some fueling? going bundled maintenance sales thought still our fuel cell but long-term moving thinking to and be being Or with kind and forward? kind have of thinking may going the this Michael got are we've in. the leases these model in? a on and was where is cell hybrid with to model all tie-in it And Is this, How the Okay. maintenance lease we fuel to are no asked with initially, packaged model fuel think

say, Nikola first from good where, all, is would cell uniquely definitely I hydrogen, now hydrogen, obviously, truck, is is whenever news production combination there, in is the have stage right? of Obviously, the of launched. orders key customers think just And the the many the we we the already I positioned. we Jeff, I considering and first truck, are sell that fuel we question this mean,

too. a Maintenance factor, is key

included? is of the and okay, whole and what with is including the then, are, why customers debates obviously, where lease etcetera. stations, bundled play so a but the will like, important think I positioned very This TCO of fuel truck, energy hydrogen that's mobile again, the key is about therefore, is discussion well Nikola there, play most So, and role, the

Thank Okay. I all That's you much. have. very

from with Please proceed. [Operator instructions] is Peterson Bill Our JPMorgan. next question

taking Yeah. Hi. the Thanks for question.

believe still in up quarter to we My Following vast and hold question and around I in next should year? mentioned that or EBITDA neutral, question is, you should we the mix needed deliver to then about we last fuel Is on mix walk the think figures is XXXX. majority think XXXX? how X,XXX into XXXX first is in to the my X,XXX number year how those second cell is, stage, this be or going to this next about at double

take I'll Hi, Yeah. Bill. that.

part, and the down that enough trucks labor to a some that. cost some For we've place. bit far to we've EBITDA able With and to to we've would of positive X,XXX not down, of the breakeven the somewhere X,XXX to it's from need the is between off positive on efficient X,XXX probably And little to EBITDA X,XXX trucks we in last the to and X,XXX, that as cover the make get time most from trucks CapEx. thinking overhead to get as bringing than just been shared trucks lower but that XXXX, still to more talked being reductions that far in then

really we positive the start flow. generating right, cash So flow, the cash

we cell to most the will is, orders. I the volume of bath, then for the but decide, we'll as again, order those we'll build let and side what the part, as said, for as now, be customer economics the on far anticipate sense the make just mix, the right fuel As

and Thanks burn. reducing Yeah. on cash nice that job and costs for

per I guess quarter plan question, year. you And can through us So current you're following maintain beyond expectations sufficient year? a $XXX guess, this burn to prior liquidity your that your this on now commercialization. feel, give I targeting million below exiting on cash

mentioned below $XXX you I now you million, expectations. need which think prior is

are or how Or, this this? be provide multiple the assume color be just here to at to is this I how least guess, function about how we So from you? raise can a urgent imminent? capital any on would on capital think you step Should raising thinking you does or helpful. raises Can feel

Yeah. are lot think $XXX Again, And difficult a million everybody's Thank capital this to been in is order, progress, to you. very to where inventory. we've our work, reducing That's Obviously, of lot from very I QX. good of improvements, $XXX on show from a decisions a that lot coming collecting right, behalf. able is working right, million. we of now right build on sales, our going

now, we get start will the of And head we $XXX right, how of in carried that and is QX actions QX. to QX, realizing have impact we as out, we into all actually those that

So reducing getting out of Cyprus, hat getting out count. Europe, of our

point and pretty assembly the benefits Also, of with at bringing much some Coolidge with in all run we're So the go QX. cell fuel will this those OpEx start because rate. line CapEx will down in done right, significantly,

get million. how $XXX So we that's that really to

of position. we question, increased good second our about And where then part your cash right? are, we We've feel obviously,

two variables. cash lower have burn those We and so with

where QX as have capital We far were you the in as bit a it if compare far as urgency rate. to little we as, less

So out to we the go and there have yes, availability, raise capital.

we afford being be aligned our capital the can are and would now, look bit that to the will at have we and with have right, we'll that on We a shares really balance. little at that, more timing on long-term but options and selective needs looking that something

half be forecasted million, the capital as second and As first cash we to of the when in through our truck. the forward half get of will really will of just in slash burn fuel needed as of cell going which $XXX the profitability, that time year, we far XXXX a function be this next it's scale year and most

spending. and So being We'll also on our with capital pretty where good and rates at strategic again, make we're we we sure are. efficient feel the disciplined

And wishes, best good looking ahead. Michael, Thanks, luck, Steve, Stasy. and

is question from Deutsche Bank. next Our Winnie with Dong Please proceed.

to one side fuel Just be, there on year? the delivery mentioned XXX for contemplated lower think basis code for uptake delivery expectations in size. seems units for the is you cell and what the quota question, bed an a the I was over quick retail

driving So I year. going And the then to what's gross change the that? guess margin expected also, for of the drivers

Yes, take can so that. I

the from order. to cell think I break guidance, some the question about guidance, backgrounds the talk just reasons don't full versus the mix. So We year building guidance wasn't to XXX. We because to don't where were bed we're reducing really XXX of for the fuel and reducing again, anymore, out going we or

out with to have see the demand part. will how shakes that We most customer the for

XXX to year, [ph] And on this alluded plan fuel sell about next has trucks. hand that resume are XXX and to, cell sold cell, Again, year. on then we will the fuel we beds are through, once we build Michael production for as those have to available

really guidance and for strategy order the build just lead the the that is what on able based build, on the suppliers. times times, to the based we're on will of So year longer, take to based little our of of a rest on bit based the lead some

off were improvements that of you at the the the gross the lot we the where overall gross will be had if a gross margin driven on from margin, to of we look of So margin, really volume. where it,

don't as we that significantly. fixed we Our rate and we've scale the next few overhead the levels to long years, to overhead about are talked is as through manufacturing need the

the really, revenue. the of be function So margin a just will

guidance. coming see the we And lower the will delivery you down. Obviously, as guidance, so you in margin see,

Tyler from proceed. with is Please next DiMatteo BTIG. Our question

question, of But, realize how the Yeah, could is bridge. else capital of good it morning, step squeeze the really optimizing part the the second time. beyond I we anything As on Thank can manufacturing done could to thank you to little terms different are coming about of the line, benefit be off the we fuel cell and cash position? is your alluded on what about efficiencies wanted next? on there a the that said portion? more labor? think that, way Stasy, in down. Can you comments on you to everyone. out that into working thinking the that manufacturing I the year color cash that resource the other phrase for you really, the inventory this you And going a provide you, and

Yeah.

for the then start production Thank can I'll side. and maybe chime Michael on in So question. the you

half. that are we been Substantially, what reduction the all enough opportunities reduction So we incremental get the in far burn very control reductions we on our we needed. is something, as right on them, QX. we'll as may actioned but you to can just for our versus and the cash And course, in that and And the side. the And CapEx feel XX% where as that first targets, spend have we spend good. as know, is CapEx was now, OpEx look half second find planned of side,

what that's already. actioned So we've

key The and working what in happened a that's just manner, could not until in launch If where do be able tied right. will that payments probably BAV areas to order. built to, switched in to similar those ability have to trucks inventory variance capital, AR plan something as collect have we this to biggest then dealers, had sell is we're one and we'll is to our and up you we the the the really of trucks alluded timely because to is cash what to to that, retail

of of we're cell little we're demand. pragmatic material the customer based of for some doing, a way. on launch, more We're approaching fuel obviously, in things indication bit So it a ordering the that

right, already over-ordering, working then of BAV we're to And order over-investing as inventory. the capital BAV, from bill we're we selling in will the not switched XXX for there. proceeds for those have the the be to year, as them a on we've rest this benefit So trucks not

where favorability that for capital of floor making a from still plan course, units. we're in those on of BAV of our working year financing, So from rest place lot working this get with sure we plan And the that's dealers. floor we'll really have financing

and So accelerate that increase we're able to collection. our able to we're

of year, the reduction, face plus launch, is the you this Yeah. the the labor side. normal. then add cell into also the first next and trucks right? on trucks. bond terms So going in we improvements [ph] significant the at This do will the to see year. We but of the is significant XXX direct But efficiency And limited the just beginning cost obviously, fuel overall truck in efficiency and of, do coolage

on also which terms amount now in We the in experience, XXXX. labor but year, other stable also of obviously efficiency with gains side in XX%, launch, you of the have done experience the companies, the from second automotive XX% see first should is

guys. Okay, for time, the perfect. you Thank

Thank you. I will now questions. shareholder hand for the call back over to Dhillon

you, consolidated. Thank the questions, which operator. we recurring There are a in few have themes

create will question the you is The future and for value is, what how shareholders? Nikola first for

Nikola. the future bright looks for believe We

right second burn In the profitability achieve the toward reduce making are we cash quicker. that difficult, We decisions to and made progress goal. quarter, but

mover truck and have hydrogen advantage production delivering a customers month. begin to the vehicles will on first next fuel We cell

also sales We battery improving partners energy the the strategy are the ecosystem electric and for trucks. advancing with

world-class look transition emissions we conscious spend, a you with Nikola, management our to making have and wise first-to-market when zero team see products. be decisions with you capital, the eliminate to forward unnecessary So at drive

be deliver we We trucking. simultaneously decarbonize to for on shareholders, on build this heavy-duty continue believe and will to able execute momentum, generating if we value promises, our and

Michael. you, Thank

second is, The you affecting government do question Nikola see regulation forward? incentives moving and how

and question. for incentives very Nikola. Government Great positive are regulations new

credits As station kilogram clean existing the up for is we addition This per will kilogram reduce in and production $X hydrogen production credits, up dispensing to the on help offering station call, costs investment California. as per and to such development. discussed hydrogen credits, reduce dispensing grants in to hydrogen $X LCSS CapEx our and

towards like fuel-cell truck. $XXX,XXX easier cost, is HVIP to the vouchers zero California A a of example great the a York program, in lowers truck states offer purchase fleets to up diesel a as California side, the On truck and acquisition more cost competitive for make which it the can New purchasing electric ownership emission truck. of the making total

demand play. also We new into see as we come will regulations believe increased

in example, the system dredge For year. California, carbon in beginning next only zero can emission register trucks line

are significant fleets there for emission. transition to incentives zero to So,

Stasy. you, Thank

achieve third is, profitability? Nikola when The question will

have achieving costs. right towards our the Last optimize a direction was quarter, step path in ways in continue a expect achieve to EBITDA we QX to XXXX. positive we finding discussed that goal, to we and

our reducing impactful are of costs margins average price, most of to While capital selling that is products. and critical, The we expenditures the material from to meaningful three volume, generate to to variables need truck. sale profitability, the for get operating bill the and gross

truck, to the trucks expect have to and sell least the to spoken double $XXX,XXX by momentum, mover as York truck of of close advantage expect reach get price the positive states breakeven, combination we that hydrogen build already estimate gross driven offerings, to will X,XXX be first to fuel-cell becomes continued to selling margin increase and the sales We've available. We EBITDA. to California. still to average incentives at approximately in per New and especially that and We like

into most that be in going production, material the the fuel-cell XXXX important is priorities of bill truck reducing costs both Now our will of one for trucks.

volume, our into the we scale will better on visibility we have based piece price As supply chain. reductions

by we localization approximately of bill our to $XXX,XXX truck. of Ultimately, achieve we XXXX. that the and can need we end materials Between components, of that profitability expect our reduced targets see to per the key desired

oh, -- me ahead. So, just go let

Sorry.

to out I'm Q&A remarks. it sorry. closing Steve I just hand close going the back for was to and

getting I'm used Great. to this.

say stay I Nobody touch, truck, that and excited since Michael, team. I for are. this of want little are. sure. but this. thought in just and close am years engineer here. to sell also for IPO we tell I a nobody we could you could to your truck, I to truck, to we to the industry, be could thinks I'm decarbonize a I've I'm everybody involved And me want over we are. lot, excited this this we XXXX. a nobody I'd with a be thank been and will. company participating. we a want they thought can seen support. in you build for we thought thank three and Nobody part let just So, we with I've will

all listening So, thank in. you for

conference. This you. Thank will conclude today's

your You at lines your thank time this may for participation. disconnect and you