U.S. truck manufacturer Nikola Motor announced it laid off 135 employees last Wednesday, as part of its ongoing effort to cut costs and improve its financial standing. The company, which delivered 88 fuel cell trucks in the third quarter, continues to struggle with profitability, leading to declining stock prices.
Despite being the only company to deliver fuel cell trucks last quarter, Nikola’s financial challenges remain significant. This recent round of layoffs follows earlier cuts, including 270 employees in June 2023 and 100 in November 2022. The company has also faced legal troubles, with former CEO Trevor Milton sentenced to prison at the end of 2023 for fraud.
Nikola’s stock has been under pressure, becoming the third most shorted stock on Wall Street with a short interest of 29%. In June, Nikola executed a reverse stock split in an attempt to maintain its Nasdaq listing, which requires a share price of at least $1. Despite a brief 20% stock boost following the truck deliveries, shares have since declined, dropping by 6.5% the day after the announcement.
According to Freightwaves, the cost of manufacturing each truck is estimated at over $1 million, while revenue per truck stands at $380,000, highlighting an unsustainable business model. Nikola has taken steps to raise short-term funds, such as selling and leasing back its Phoenix headquarters, but this move could come at a long-term cost.
Despite the setbacks, Nikola’s CEO Stephen Girsky remains optimistic, stating, “Despite overall market headwinds, Nikola remains focused on our mission to pioneer solutions for a zero-emission world, and we’re doing it one truck at a time.”
