Nikola (NKLA) refocusing business in North America

Nikola (NKLA) released first-quarter earnings on Tuesday, announcing that it will focus its operations in North America. After building sales momentum in Q1, Nicolas said it will focus on what it knows, including fuel cell cars.

Nicola is refocusing its business in North America.

Heavy-duty electric vehicle and FCEV maker Nicola said it produced 63 Trey battery electric vehicles, 31 for dealers and 33 for retail sales in the first three months of the year.

Nikola CEO Michael Lohscheller said the company will focus business where it believes it has an advantage, including the North American market. Lohscheller said during the company’s Q1 earnings call:

We have the right products at the right time, and going forward, we will focus on the North American market, hydrogen fuel cell vehicles, HYLA hydrogen fuel business and autonomous technologies.

As a result, Nicola is selling its stake in the European joint venture with the Iveco Group. In return, Nicola returned $35 million in cash and 20.6 million shares to the company.

Last September, the Nicola and Iveco joint venture revealed the Nicola Tre BEV vehicle designed for the European market, saying it was looking to expand the partnership last quarter. Meanwhile, Iveco will continue to supply Nicola and is expected to remain a prominent investor.

Nicola believes it has a first-mover advantage in North America and holds a good share of the commercial truck market. He also said the company is building its hydrogen energy business to drive long-term growth.

The news comes as Nikola looks to save money in the first quarter of 2023 amid growing losses among most EV startups.

Nikola Q1 financial results and highlights

Nicolas reported revenue of $11.1 million in the first quarter of 2023 and an adjusted loss of 0.26, falling short of Wall St. estimates.

The commercial EV truck maker posted a net loss of $169.1 million, compared with $152.9 million last year. Nicola ended the quarter with $121 million in cash, down from $233 million in Q1 2022.

The high losses are a result of the rising costs of producing and selling BEV and FCEV trucks, so Nikola is looking to double down on the North American market rather than expanding further into other markets.

Nicola also said it will temporarily stop production at Coolidge at the end of May while it adjusts its assembly line for both hydrogen fuel cell and battery electric cars. After the upgrades are complete, Nicola says the battery electric tray will remain a built-to-order product.

Production is expected to resume in July as the first hydrogen fuel cell cars go on sale. Nikola estimates that battery module and pack production at the facility will begin by the end of July and assembly of the Bosch Fuel Cell Power Module by the end of the year.

Nikola’s backlog of hydrogen fuel cell cars has grown from 12 customers to 140 orders. The first two of the 10 Gamma hydrogen fuel cell cars have been completed and the rest are expected to be completed by the end of July.