Nikola appoints Girsky new CEO, posts big Q2 loss; shares tumble

Just as Nikola Corp. took a step toward stabilizing its finances, it announced a big loss and a sudden switch in CEOs.

One day after winning approval to issue new shares to raise capital, the Phoenix, Ariz.-based zero-emission truck company said Friday that Michael Lohscheller stepped down as president, CEO and as a board member to return to Europe and attend to a family health problem. Nikola named its board chairman, Steve Girsky, his replacement.

Girsky becomes Nikola’s fourth CEO, continuing a churn that has seen leadership change almost annually since the company’s founder Trevor Milton resigned and was convicted of defrauding investors.

Lohscheller is an industry veteran who previously headed the Opel brand and was the CFO of Volkswagen’s U.S. division. Girsky was previously vice chairman of General Motors.

“Since Nikola’s inception, I have been a champion of its mission. I am energized to take on this role and build upon the work of Michael and the team,” Girsky said in a statement.

Widening losses

Nikola also reported growing losses Friday.

The company lost $218 million during the second quarter compared with a $173 million loss during the same quarter a year earlier. Revenue fell 15 percent to $15.4 million.

The company burned through $287 million in cash in the latest quarter, up from $274 million in the same period a year earlier. Nikola ended the quarter with about $295 million in cash and cash equivalents at the end of the second quarter, down from $529 million a year earlier.

However, this week’s approval by stockholders to issue new shares underscored Nikola’s momentum in recent weeks and capped a recent stock rally. It has won critical grants to build out its hydrogen fueling network and has booked new orders, including one from a large trucking company.

The approval to sell more shares was “critical for continued growth and success as we move forward with our strategic priorities, including autonomous technologies and software, our HYLA hydrogen ecosystem and the recent launch of the Nikola hydrogen fuel cell electric vehicle,” Lohscheller said in a statement.

The commercial fuel cell and electric truck maker has tried twice to get shareholders to approve issuing new stock only to fail to reach the required majority of all shareholders to move forward. But a change in Delaware corporate regulations last week allowed it to move forward.

The new regulation requires only a majority of voted shares to win approval instead of a majority of all shares.

Next steps

Nikola can move ahead with its proposal to double its outstanding shares to 1.6 billion from 800 million. Issuing new shares to raise funds is critical for its pivot to producing hydrogen fuel cell trucks and building out HYLA, its hydrogen production and distribution network.

The company’s stock price has rallied as Nikola has made headway in recent weeks. Shares in Nikola closed at $3.40 on Aug. 3, a 534 percent increase since closing at a recent low of 54 cents on June 6. However, it fell back 26 percent to close Friday at $2.50 after Nikola disclosed its second-quarter loss and CEO change.

Nikola announced July 31 that it won an order for 13 zero-emission Class 8 trucks from J.B. Hunt Transport Services, one of the nation’s largest motor carriers. The order covers 10 battery-electric big rigs and three hydrogen fuel cell trucks. And Bosch said last month that it has started production of the fuel cells for Nikola’s trucks.

Hydrogen strategy

The trucking company plans to use the tractors along key trucking routes in the greater Los Angeles and Phoenix areas. Nikola’s hydrogen arm will supply the hydrogen and fueling infrastructure.

“These zero-emission trucks from Nikola advance our progress towards achieving our ambitious goal to reduce carbon emission intensity through viable solutions,” said Nick Hobbs, chief operating officer and president of contract services at J.B. Hunt.

J.B. Hunt operates a fleet of 21,000 trucks and is ordering handfuls of zero-emission vehicles from various manufacturers as part of a goal to slash carbon emissions by 32 percent from a 2019 baseline by 2034.

Nikola said last week it had surpassed 200 sales orders for its Class 8 hydrogen fuel cell tractors. The order book represents 18 customers.

Nikola also said last week it had won an additional $16.3 million in environmental agency grants to develop seven open-network hydrogen refueling stations. It has obtained a combined $58.2 million from California agencies for the stations.

The company is working with charging and fueling infrastructure company Voltera to develop up to 50 stations in North America over the next five years that will operate under HYLA.

“Building an integrated, hydrogen ecosystem to support hydrogen fuel cell electric truck deployment and creating a scalable energy business is a top priority for us,” said Carey Mendes, president of Nikola Energy.

The commercial vehicle company is following a strategy pioneered by Tesla with electric cars. Tesla built its own charging network because, at its launch, there were almost no places for an EV to charge. Similarly, Nikola is building a fueling structure so its customers will have access to hydrogen.

Nikola’s strategy is to build a network of commercial hydrogen refueling stations in California and expand eventually throughout North America with locations on the major trucking routes.

Editor's note: Nikola lost $173 million during the second quarter of 2022. An earlier version of this story used an incorrect figure.