Nikola (NKLA) 2 Nov 232023 Q3 Earnings call transcript

Good morning, and welcome to Nikola Corporation's Third Quarter 2023 Earnings and Business Update Call. [Operator Instructions] We'll begin today's call with a short video presentation, followed by management's prepared remarks. [Operator Instructions] As a reminder, this conference is being recorded. It is my pleasure to introduce Dhillon Sandhu from Investor Relations.

Thank you, operator, and good morning, everyone. third earnings Corporation's call. business Nikola to quarter and XXXX update Welcome

release comparable are and call.Today's references me the measures Actual CEO; this U.S. our the stated. to plans. of Relations we results and slides Appel, most press Girsky, non-GAAP also to include are about morning. at presentation QX Vehicle of forward-looking along with section results, our Pasterick, A discussion includes those Joining be release Steve GAAP Investor Christian measures The Stasy can release end reconciled today found distributed may found These press results be issued differ business and was CFO discussions today.Today's expectations from can and Platform. of future today's detailing earlier statements website, financial the on measures. accompanying Head the earnings materially our

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not statements.After Christian our prepared shareholders.Please cautioned undue are conclude forward from questions analyst the will presentation, with will remarks, and Q&A. provide begin put presentation. by looking You on followed the reliance Stasy to you.[Presentation] Thank Steve, video their Then, video we

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believe built Chairman scaled us hydrogen Board Joe During the team of have knowledge also the recognized President Operating on-the-ground and bring towards announced and real Mary and Nikola's with Joe automotive in technology Connected hard-charging Cappello where is served Chief America. Officer; folks even careers. move Mary of previously Mary be in we and of will infrastructure, Joe and President of industry had quarter, into of his to of third success Energy.I she lots at to X are the of Mary make here. They've are worked their they as Chan push the Nikola.These their greater General success. because and throughout CEO Iwatani, who businesses expertise International.Joe on need the serves from the hiring Iwatani don't difference help These updates. who want of years as served and a Nikola connectivity as and business of Group. Magna to Global joins a he Corporation where as here Motors, people leader mission.Let's Services

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and the Huge huge morning, years, new this fuel for milestone for thank and Christian team, to the truck. for cell is the especially team been a and Good a launching many Nikola truck page developing everyone. you congratulations turning company. the We've for entire this

focusing convertible Now, QX things tripling the that burn matter capital unrestricted commitment and future.We in results. the am on by to approximately cash during and cash by spend our primarily $XXX QX markets, to continuing this were year. tackling unrestricted successful team's to the our numerous pleased with position the nearly Despite of increasing through to first headwinds with financial thus million discipline the quarter, and ATM, quarter our notes operate reduce raising I quarter cash million $XXX.X this from since on accessing

deliveries on executed cost-cutting liquidity up to came of we target hand.Quarterly in QX, our dealers. lot XX% delivered our AR impact the to offset $XX quarter, structure a realized The more to to working from truck of by cell a inventory improvements hydrogen at the always from recall.We improvement of And million use We million, a trucks in electric held X There and to months we million, use cash do. goal $XXX is looking Prior came initiatives QX to we're $XX in with to well due we fuel scale $XXX.X slower-than-expected recall, million. battery below capital have battery in XX upon million collections our $XXX.X electric revenue.Due improvement truck cash this benefits recall, make electric towards cash having use. and are lot battery of from digest the work cost progress making reflecting of early the to good use QX. of to beginning

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from first is Our question TD [Operator Osborne Jeff with Instructions] Cowen.

job what's the as first see fuel in Great readiness with interfacing both in the BEV, and some quarter right the the on policy customers to that moving of the your the the but on around dialogues Curious of aside observations relates issues. fleets recall having putting it with? level the direction, cell the to you're the

super question. The customers interested in good this. So are

is funnel CRM, to every You would bank increased growing argue the And at I XXX. the order the saw of what's the day. top

over So it's even -- X:X and a right now cell would maybe I fuel more. little say and BEV

on other from of terms of role? Outside in member quarter customers, the any shifting observations Board the investor in role, an first the job

who's the it at no some years like up.Certainly, of less anything But was challenges a just page the is dealers of nobody slides, an Nikola, on there, And is, not really if this you here, of highlights an tell hosted got you X at on I place interesting the event and the me people. learn around Coolidge fuel you amazing people when up, have of in to first there from was There XXX the year launch that people would here away up running was there at people who event. celebrating there.And were your laugh burn that was It were So the this, who if the were day some XXX the -- industry is every there's But at showing it's so. the their cash who But was There I that saw the there. truck a are turns of that Suppliers Suppliers were orders the was challenges. Nikola, spectacular. like Many stuff. the and hydrogen in goal there, the about think events path here. the are were is were momentum -- this Jeff.One customers quarter down that Nikola thing stuff. XXth. anything. the launching there's are event, pretty and quickly are their was showing I the in And ago, of continuing. way screw cell the ago, and day good the these one just being is and place

Perfect. Maybe quick one follow-up.

was or side, On on that's the to BEV for XX-odd -- side dealer readiness one XX. these people location? customers one sort orders. the one units, planning you at X at think of just the an depot. a So beyond multiple said, Is surprised I are the or are for see charging that What's obstacle XX XX, been I the with the truly trucks

experience has dealer So this. that around

like date But was. and trucks. them has things case customers this. issue And with. eSKIDs customers to chunks are that their has going and help it We dealer charging experience But with the that general, that and up an to taking it's than particular, in are deal in are still this on So that. to of understand is around have customers can better

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

Congratulations. Steve,

Yes.

welcome. And Not story. you've this that away been from

question So a Stasy. for a question you for and

truck you because phrase. I the little you, using want things the about opportunity not a For But can just talk also how opportunity? that in the I that across the participate and hydrogen highway, of think through side different but but Nikola about see not different one that, to going in how you expand as the sales, only to that the means to we And just California, it energy country developing? you're here, is on more And not people. talk

Sure.

and market. bunch trucks the Jeff, of make need this blow we to we and the be our target dealers routes, out work, market. wholesale a that are hydrogen This them where where -- where need model focus the and to routes customers run So just and have customer We can't is, okay. those that's are, density, the who the came the into know

incentive So is most the friendly. California

it's got the in and As we video, sticks. carrots said

to We lots And people easy are -- dealers, it California. not well maze we're our to as customers this works. how And people it's is educate that incentive people just of deploying in navigate. not to educate deploying

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business. Okay. then the And side energy the of

what sense? in side, energy the Well,

energy help how we build the us this But as trucks does business I easy out to look along that highway? like company understand what pretty Well, participates? mean just selling the visualize.

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dispense purchase. and you can You can and you transport

economic X We hydrogen.We -- call side. the are in are, hydrogen those of capital don't it, like the to So we'd be there. buckets be have to

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to course. of add that. Yes, just quickly And to

we market, more there term, mentioned, the early Steve they energy with on and focused In revenue. now.So it time we enabling want the financial a have on have our has longer operations, business, right?I and right is the will mean, at make cell customers And to are take this look less hydrogen near-term, it as we're how a sure where of the to need is ramp far there near making as we aspect truck we when sure experience profit to we're first up we're as fuel and term. and focused So hydrogen it. customer

the shared it's you truck XX,XXX operation. I in to for truck call XX,XXX last annually think in with per that's revenue we've guys, in right, hydrogen, about

only hydrogen you'll likely the out negative say, meaningful the we short the stream XX will revenue flow So truck in next, have as scaling term, start margins. months.And start seeing through

drive We of build pay to incentives. a we're make the density because right, we truck have need to to that to that and or that, However, for integrated energy is, that utilizing because of doing we right, willing regulations, make manage premium, had we the solutions, to the cost Utilization comes and out sure hydrogen that are are to things what get eventually margins.One, us will come dispensing participate to online drive economics, us have. as the as the down help the obviously one, short that down. will in hydrogen right, assets supply to factor is and more we producer the we longer are the of our the term.And assets in able ability help also number term, in economics Steve several and need that customers find mentioned cost finance sure can and positive

ago Stasy, XQ were a And Thank ago. want at trying quarters. next terms a to to by should I look The was year?And just think of through this the cash end one about or we recall, evolved at story rate run X of Okay. the the in year. I you because down of be final the the where I the business, And do that's cash at quarter few quarters targeting to run talking from then, look a in if target going run if a get remember I out of million underlying year? about a But the the where you guidance. follow-up. for end $XXX to has rate play just as burn end it detailed you of burn where the itself are rate can, next

Great Sure. question.

cash story evolved, will you're targets continue just the -- But our changing. are evolving. burn -- the So has and it financial right, story not

are we focused. So

We are having like that the through. we're some managing battery challenges goal

As a so about $XX million. year temporary -- our will million. There that this that QX of for a result be was to of ultimate $XXX target in increase

then is here. through to fuel BEV BEV is And QX recall, inventory delivery cell that's for we sell due QX. the the guidance expecting can't what And effectively being supply in I'm chain by reduced million X things.So $XXX So challenges. driven obviously,

capital, That's average are million goal year, up work selling burn again, goal right, the $XXX the XXXX, reverse for burn that working this and a through to So part next that those million. the challenges factors are in items quarter trucks. they'll $XXX for those XXXX. cash -- temporary X cash They the again, year.For remains are we driving the in same, goal as

So that changed. has not

little we a half see cash to some a AR the that, benefit the the benefit work of BEV in the BOM year. the We will remaining in as through then heavier and benefits execute of expect reaching well of the see burn from targets of first through bit year as we selling the from BEV reduction our offsetting and as the selecting inventory the BEV later now recall.And

XXXX million to So average $XXX out about will quarter. a

out add The going trucks least have let And and trucks to the get just next we to be me from trucks And highest we some on produce. to BOM, the can to that, early quarter commitments that because whatever profitable so the ago this door. something trucks customers. going the made we we're They're the early are launch these quarter doing to prices Jeff. time the were

to pay find And down. mentioned it before, out premium through, we being as move And comes -- goal the is the that and they're end of in for zero-emission. BOM to front the customers we're the and get we of there As Stasy applying willing value they're more a this. volume, the team

from Peterson Bill question JPMorgan. next is Our with

to this up on want pick I last question.

where tipping guess, as X.X fuel that the that should I the XX trucks to mentioned BEVs pack. I ago, the break make in provided think that cheaper feel had the this that points you call, about is.Basically, the talked of confident maybe total a sense one cell volumes? in I calls and where X point to still you prior guidance is So timing, even. of earlier quarter how guidance X,XXX X,XXX in Do of around think call, trucks. majority breakeven think terms could up about being majority for And fuel in cell 'XX, team to kind we of I of I that's think a guess, in the get that? BEV you trying the the a interest on?

changes maybe of the So as that some well. economics

Sure. expand Yes, to that. happy on

breakeven So remains again, goal same. the the

of a I've a seeing are for with some XXXX. drive We of mentioned little bit the challenge things

this that half have an customers the push obviously, they're those of the a So because And volumes do to early one early of have of of right, lot for XXXX.Some preferential QX things sales, FCEV reduced year. already adopters. will things we this pricing, first into highlight, lower order right, the of

fuel at willing as obviously, BOM on So can working if right? that volumes, we cell our below rate, for time.On offset said the sure which targets, the a finding same it's fuel And a XXX. say, can we we once that's BOM challenges, we margin to now. can X with about XXX, Obviously, price remain sell through new can we with can that's something target the targets, to and ultimate to by the end XXX even run making we again thing manage of If XXX We're and gross the our assuming truck for to XXXX. BOM the get to average a cell. XXX BEVs, for pay have pack chain get break to are work achieve years normal we pay trucks have to or Steve we to that, premium through that we'll need maintain from customers a get that quarter, selling premium.Supply the step other That's basis. of about to

hit the So I maintain we're we to of have we and for.Again, targets. ASP certain really as sure level that's BOM make mentioned, our we magic a looking number

just And reiterate, Bill. to the thing, only

to value than of recall this One a the other trucks. that, end a "Why there. for on zero-emission, tested are things front in so, get that my BEV truck lot people know we're performs complaints, we actually we've of haven't of truck people being of from when pay out out learned didn't I and back?" willing things. because And and The of early is pay are -- do lots better up. how much our lot they're And the to getting trucks but it. trying we finding And trucks to learning we're we're as And willing well, what like our hydrogen we're people

I release so maybe more partnership with Voltera looks wanted had Okay. as I I it of versus on -- a just forward.But in stations. you mean, information as the you well of new talked less we'll milestones. information X this, business. of about some as move kind get with some a there's check know It you we the as like relates to to And energy your prior a in presentation lot a have Yes. head

to credit end of California there by maybe deploy this online an -- how hub, understanding 'XX. get supposed be update -- of that's The mobile the first you're well.And an to clarity. was for waiting course, coming end acquired what XX-BEV refuelers like But tax year.FII, to in supposed the think of here as of by try the I station kind X get hydrogen then of you to

some it try they're sense. context and projects color are, I'd investing stand? to what to So we where makes you I get around like just do a But these know waiting on? of where where maybe sense provided

Yes.

you've be think And be efficient, just customers, close truck. about to ahead clear, got can. is a you energy need somebody to going one at model, got got behind. you and point, and when And you've somebody very So this as any be as you be to keep going you've is to to those

and truck stations has got in we're that like to supply case So if a issues, don't and skis getting things on the in our fuelers where get chain we want over place.

in made, what So don't frankly, California using a about X year. less.And assumptions fuelers we mobile given we're need need the drivers XXX doing we are this something and seeing. early day on XXX-mile we is We driving were assumption truck every

us here. less enables also that So to use

efficient to there's we being just capital number -- be capital here; number one to as the this customer that about satisfying other is if want peoples' So is sites.So use opportunity two efficient here. and again,

sort where going. of that's So we're

I to Okay. question in related sneak If supply on the chain. kind one It's could more. of

for truck is this can a fuel given supplier for fuel Is Is utilize chain So you sufficient at the on same supplier? heard if volumes plier issues? side? you different cell will I supply expand this cells, that structure? is cost that has issue talked your Are Or more the so, was -- able about a bankruptcy. too, battery the third can the this BEV. on can tax know on the point?And you a fuel better the it get to apparently that through you And -- supplier going cell? then,

talking to I'm about when the we're that. out. not BEV come about it So talk yet. out premature will sure it comes supplier It's

going It's there wouldn't normal that are different the suppliers they're we're insurmountable. describe any through there On supplier launching new ours. chain out through just is the other. I going their other front, that going issues technology, supply battery creating any through launch than But issues. about is hiccups.Nothing are launches, launch their

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BTIG. question DiMatteo with next Our from is Tyler

your of to the mobile and that what the California. been Southern Can in I some you that, just more up on little add fuel Steve, to fuelers. I the fuel comments the mean, has cell related third-party with follow and initial your mobile related fuelers, of please? a assumptions interplay regard to color the some cell feedback truck, to wanted

we've running in been So demos California.

We to focused We're demos are of on Southern I think Most we've demos. get XX% spots miles in demos. these peoples' done now over fuel California. fueling got uptime. our other X,XXX at our spots right into and

covers quarter, don't know start that. and maybe quarter We anything or it. -- think first demoing in will in that's the north, else in but demoing next I -- think the I -- so. probably -- you We'll something anything like And the that that's start else north I TBD,

well to your to a Can really follow about maybe regards market and how sales color then the sales to of both your up you're more those utilizing And as as go comments sale together orders? the source bit great. more internal in just network want terms with related on of provide you Okay, the I to team thinking to of team. dealers'

Yes.

So the we educate need us. a own It's -- is old the prime great super lot amount to for California is targeted opportunity this the And supplementing these a fleets, whole tremendous smaller frankly, system. also we tricky is navigate And helpful to voucher stuff state educate with pretty voucher on a of towards dealers, a for target to us. And of voucher selling complicated. which is the dealers. new team ground, is industry here. and customers think, technology to having our I an the need the

next from D.A. Mike Shlisky Our is Davidson. with question

one as X orders? into you've into first there any you the you binding XXX nonbinding refresh touch fleets? else? today. have to those or built to on a Or to -- the being infrastructure is wanted it mentioned memory, in my those through with test something orders, Or make is first? what Can to Do I go of has happen of

Stasy?

Yes, sure.

some more demos helping time customer demo incentives about with those there's, that has things from size larger couple take But of get changed. to comfortable infrastructure, we're obviously, because next disclosed for we've in dealers already, weeks go Nikola I lot applications depending vouchers, require vouchers we're But The application with of making months, we're to that big the require like process.Once is we're a so start companies a working with essentially and trucks. think to one, a parties. a and we the have demos, right, started processes.Incentives, is their -- lot have for go happen would right, and what changed, which -- very And new a can couple in, to fleet of California the a which of all the the third the having closely for the customer. take anywhere done, hydrogen time, them customer to this is and of on truck the about here. through or with larger Oftentimes, right, large them stuff HVIP few people, have things Nikola some through very them, for working customers really fuel of haven't of on in hydrogen thing, is process. progress of sure those cell making right number incentive do a we good them.So

own already things X by I main our We say been to for that into binding have that. customer the early locations. have orders. purposes.So operating mobile negotiations California lot we're Obviously, kind orders We've XX XXX. that have are We to a out in Nikola. happen them dealer pricing and of the to turn already plan like fueling of by the need into there's, to next year, will those of received turned things

half your for covers given our So guidance of that production essentially QX.

going the mentioned that you're today, second we not a of We the on order you end to get the probably until -- quarter. call truck if

being ones of or these the the that zero-emission most highly. is value part challenges So prioritizing customers to

bought was outside I you you to can But the perhaps And understood and had those of California the I details. -- and the status that back. out network. like dealer some secondly I dropped California dealer of during you turn I appreciate share inventory today plans dealership assistance to can Stasy, correctly, sure that? If wasn't the about. And the the wanted to so that implied an it and share of dealership. your what was just develop all sounds broader that kind to quarter outside

Yes.

the depending the made in are much business. resources and to trucks demand, buy made dealers which the buybacks required. contractually we on relationship the that those of has the lot dedicate -- trucks. that And from -- A dealer time they're we were depending dealer, on think times, how to to the terminate Nikola. with back the decisions dealership by back current choose combination I to Nikola X bought Those

outside necessarily it's So because just happen dealers these to be not of California.

We on California. primarily are focusing

any if relationships other do most to that have necessarily in future we sign any likely this California be But expecting they're on than active they plans will be -- more we cancel at forward. going to going dealership not, likely dealers, So point. don't

call will now for investor Dhillon questions. the over back to hand the I

production, received cell ] into truck series electric platform. fuel Three, liquidity. be from truck Thank up electric the investors The X of of strategy; through majority operator. and summed battery orders; can a and questions We which Two, topics: repair you, [ and hydrogen retail deliveries Say one,

about So production, hydrogen Steve, orders how received fuel question. cell truck date? first deliveries electric think many off been start do let's to How the and have with we

July Coolidge, began delivered Thank October on production late truck We soon up will trucks trucks hydrogen formal per in trucks fuel capacity trucks zero wholesale September delivering to event electric production operation captured then and and XX of the fleets.In delivering for you, will fleets and year. end had the of Dhillon. They the our X,XXX we have on start XX. begin cell to commercial a to dealers. We launch first customer

capacity we truck production more with hydrogen ensure XX to components and the have meet we and next. QX. to than to enough customer of So targets cell different this year materials is are and production our more our from electric our I earlier, dealers than suppliers have our targets working and nonbinding fuel And we received our demand.As XXX to customers. the That have for and date, delivery orders stated Nikola guide meet

much truck next there Clean will in trucks begin replacing Fleets into rule customers Advanced for will when ICE trucks effect not our a the late be trucks of now a year.We the appetite So beginning likely and ordering zero-emission believe in goes with until QX receive XXXX vehicles. California drayage market large customers

Can our electric we to provide Thank strategy you, Say the some you forward Many how of Steve. on truck. the on questions had with battery color to and do plan with recall there? the move remedy

Sure.

we the The X.X replacing were existing packs truck new with an packs electric want one seeing trucks dealer from XX with in strong also to HVIP to are truck will alternative I upgraded reiterate customer we the earlier, and discussed deals electric trucks supplier. I voucher the come battery applications. As receiving California POs for demand battery features. for that in continue from submit

Nikola right XXXX the platform have products believe truck-tractors.We depending truck powertrains, And for were provides X October, option on we vouchers optionality is their the issued having in cycle. requested duty electric with XX% customers battery approximately which had that forward. of As of moving X one

battery stated in having QX trucks hands customer electric before, back anticipate first XXXX. in we the I As

capitalized orders well the are investors the topic. On how to production? asked, next ramp and Great. to you take Stasy, new

have the million. to So our during quarter, access tripling and We job our capital $XXX.X the front, $XXX cash we balance sheet. strengthening cash maintained and liquidity done QX third good raised on approximately million a nearly since unrestricted of

on battery We electric the X fuel hall us produce and to Coolidge, have truck mixed-model completed the the both line. truck Phase cell allowing hydrogen expansion and assembly in line same

to anticipate truck have demonstrated next for the increasing the ability we much on a access few in runway. spend good CapEx scale And years.We our liquidity the making not need capital to So we're business we'll strong to progress markets.

today's conclude will Thank conference. This you.

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