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Nikola Faces Weak Demand And Founder Dispute Amid Test Runs

EV manufacturer Nikola Corp conducts test runs of its hydrogen-powered fuel cell truck and trailer amid investor urgency and delisting threat.

Electric truckmaker Nikola Corp (NASDAQ:NKLA) wrapped up its second day of test road trips on Thursday amid weak demand and a founder dispute. 

The EV manufacturer conducted test runs of its hydrogen-powered fuel cell truck and trailer, with CEO Michael Lohscheller and engineers participating in the drive from Phoenix to Flagstaff. 

The scene on the M25 Tuesday 30 August 2005 after rush hour motorists were tonight warned to avoid one of Europe’s busiest stretches of freeway after a truck fire brought chaos. Nikola faces an urgency from its investors to a no vote. Tim Ockenden/PA Images via Getty Images

On the second day, Nikola showcased its Tre BEV transporting an HYLA mobile hydrogen fueler from its Phoenix headquarters to Payson, Arizona. HYLA is a Nikola brand established earlier this year to provide hydrogen production, distribution, and dispensing solutions. 

Nikola is an up-and-coming automaker that caters to the trucking industry that is fuel cell powered by hydrogen. 

The company was expected to offer its customers free hydrogen up to one million miles.

Nikola would compete with Tesla in the semi-truck industry for alternative energy as Tesla is only powered by electricity.

Semi-truck company, Freightliner, is entering the alternative fuel market with a semi-truck EV of its one to compete with Tesla.

Deliveries of Nikola Tre BEVs are already underway, while Nikola Tre hydrogen FCEVs are expected to start deliveries in the fourth quarter. As of May 9, the company received orders from 12 end customers for 140 hydrogen fuel cell trucks. In the first quarter, Nikola produced 63 Tre battery electric trucks and delivered 31 to dealers. Due to ample inventory, production temporarily paused at Coolidge but will resume in July to accommodate both battery electric trucks and hydrogen fuel cell models on the same line. 

“We have a first-mover advantage, and frankly speaking, nobody else is out there,” said Loscheller in his interview with Forbes. “And not only do we have a good truck, but we also set up the hydrogen infrastructure.”

In September 2020, short-seller Hindenburg published a report labeling the electric carmaker as an “intricate fraud.” Hindenburg specifically pointed out a video released by Nikola titled “Nikola One in Motion,” alleging that the truck was towed to the top of a hill and released instead of being driven. 

Nikola founder Trevor Milton was later charged with fraud in October 2022. However, Milton, who remains a major shareholder, recently took to social media to urge investors to vote against the company’s proposal to increase the number of shares it can issue, citing the risk of delisting.

Nikola responded, stating that Milton’s claims misrepresent the facts and violate agreements made when he departed the company in 2020. NASDAQ issued a delisting notice to Nikola last month due to its failure to meet minimum stock price requirements. To maintain its listing, the company must trade above $1 for ten consecutive days within a specified period.

“We like the strategic focus and view the FCEV as a differentiated product,” said Jeffrey Osborne, an equity analyst with TD Cowen.

Produced in association with Benzinga

Edited by Alberto Arellano and Kyana Jeanin Rubinfeld

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