Nikola Motor, the manufacturer known for its fuel cell trucks, has announced another round of layoffs, cutting 15% of its workforce. This comes on the heels of significant layoffs earlier in 2023, when 270 employees were let go in June, following a reduction of 100 employees in November 2022. The company has been facing mounting financial challenges, despite achieving a notable milestone last quarter by becoming the only manufacturer to put fuel cell trucks on the road.
The layoffs coincide with Nikola’s ongoing stock market troubles. The company’s stock is the third most shorted on Wall Street, with a short interest of 29%. In June, Nikola executed a reverse stock split in an attempt to boost its share price and maintain its listing on the Nasdaq, which requires a minimum share price of $1 for 30 consecutive days. Before the split, shares were trading as low as 30 cents per share.
While the announcement of selling 88 fuel cell trucks briefly lifted Nikola’s stock by nearly 20%, the gains were short-lived, as the stock dropped 6.5% the following day and has since continued to decline. Freightwaves reported that each truck costs Nikola over $1 million to manufacture, while generating only $380,000 in revenue per vehicle—a business model that raises sustainability concerns.
In an effort to generate short-term funds, Nikola sold and leased back its Phoenix headquarters, a move that could have long-term financial repercussions. The company posted a quarterly loss of over $133 million in the second quarter of 2023, although it remained optimistic about future growth. Nikola noted that increasing sales numbers could eventually improve its financial standing: “We expect this revenue stream to grow as volume increases each model year.”
Despite these setbacks, CEO Stephen Girsky remains positive about Nikola’s future, 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.”
The company’s leadership turmoil has also added to the uncertainty. At the end of 2023, former CEO Trevor Milton was sentenced to prison for fraud, casting a shadow over the company’s future as it navigates an increasingly challenging financial landscape.
