(Reuters) – Nikola Corp on Tuesday reported a bigger quarterly loss and said it would pause production to streamline the assembly line at its Coolidge, Arizona, factory amid sluggish demand for its battery-powered trucks.
The company said it would double down on cutting costs and that it will build battery electric trucks only to order, sending its shares down 13%.
Investors have focused on cash reserves at Nikola and other EV makers amid fears that slowing sales could push the companies to pursue more share sales to raise funds.
Cash burn in the first quarter was $240 million, compared with $200 million per quarter in 2022, Nikola said.
“This level of cash burn is not sustainable for our business, and we are looking at every option for reductions in spending,” the company’s finance chief, Stasy Pasterick, told analysts on a conference call. The company also seeks to raise more capital, she said.
“I am personally driving renewed focus on aggressive management of all three pillars of working capital: cost reductions, specifically payables, inventory procurement and management, and of course, cash collections,” she said.
The production line in Coolidge will resume in July and accommodate both hydrogen fuel cell and battery electric trucks on the same line, Nikola said, adding that the focus will be on building the former.
Nikola’s net loss widened to $169.09 million in the quarter, from a $152.94 million loss a year earlier.
Nikola said it would sell its 50% stake in a joint venture with Italian truck maker Iveco Group in Europe to focus on the North American market.
Nikola added it was evaluating a potential restructuring of its Romeo Power battery making unit that might include a sale of the assets or filing for bankruptcy.
Nikola bought Romeo, one of its battery suppliers, in a $144 million deal last year in a bid to bolster its supply chain.
Nikola shares were down 12.8% at 86 cents on Tuesday afternoon on the Nasdaq.
(Reporting by Tanya Jain and Tiyashi Datta in Bengaluru and Abhirup Roy in San Francisco; Editing by Sriraj Kalluvila and Matthew Lewis)