In a recent series of US Securities and Exchange Commission (SEC) filings, Nikola Corporation has disclosed stark financial challenges that raise substantial doubts about the company’s ability to continue operations, including two rounds of staff layoffs (October and again this month, December).
The electric and hydrogen truck manufacturer has reported substantial net losses, including $966.3 million for the year ended 31 December 2023, with an accumulated deficit approaching $3.6 billion since the company’s inception.
In a candid disclosure, Nikola explicitly stated: “We have a history of losses, expect to incur significant expenses and continuing losses for the foreseeable future, and there is substantial doubt about our ability to continue as a going concern.“
Nikola currently estimates that its existing financial resources are only sufficient to fund operating costs and meet obligations through the first quarter of 2025. The firm has acknowledged that it “needs to raise additional capital to continue as a going concern“, with no guarantee of success.
Workforce reductions and strategic challenges
In response to these financial pressures, Nikola has implemented workforce reductions in both October and December 2024. However, the company recognises these actions may have unintended consequences, potentially resulting in:
- Loss of institutional knowledge
- Decreased employee morale
- Potential challenges in attracting and retaining talent
Future outlook and business strategy
The company plans to continue several key strategic initiatives, including:
- Validating and manufacturing trucks
- Developing hydrogen fuelling solutions
- Equipping its manufacturing plant in Arizona
- Expanding design and development capabilities
Despite these efforts, Nikola admits that its “potential future profitability is dependent upon the successful development and commercial introduction of our trucks and hydrogen solution platform“ – an outcome that remains far from certain.
Capital raising efforts
To address its financial challenges, Nikola entered into an Equity Distribution Agreement with BTIG, LLC on 9 December 2024, which allowed the company to sell up to £100 million in shares. However, the company acknowledges that accessing this agreement depends on trading volumes and stock market performance.
The comprehensive SEC filing provides critical transparency about Nikola’s current financial landscape, with the company openly acknowledging that without sufficient capital, it may need to “curtail or discontinue operations“, which could “materially and adversely affect [its] financial condition, results of operations, business, and prospects“.
