NKLA - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to the Nikola Corporation's Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. We begin today's call with a short video presentation, followed by management's prepared remarks. A brief question-and-answer session will follow the formal prepared remarks. [Operator instructions] As a reminder, this conference is being recorded.

the begin now will video presentation. We Thank Presentation] you. [Video introduce It Officer, Legal pleasure now is to Nikola's Britton Chief my Worthen. Thank you, Britton, you may begin. patient, onboard Operator: we be we slight having Please technically will be momentarily. are difficulty, Please be patient. you. Thank your We patience. thank you for

We will running and be you. momentarily. Thank up

Britton Worthen

morning today Thank me Kim Nikola Corporation's call. Mark Brady, Nikola; and Russell, Chief Chief Welcome second you everyone. to Officer. XXXX quarter and earnings of Financial good is With Executive Officer

for will we XXXX and share our June the our on and environment results full quarter year September call, views our XXXX. release business outlook financial was results The little Investor Relations of website, today's financial Pacific slides distributed the accompany meaning with forward-looking the the company after quarter XXXX press During Time that laws. for section our a detailing presentation this Federal along the within A.M. certain call. of Q&A release includes earlier the and our Securities Today's can statements presentation today's The the X on morning. be found and

statements result differ events expectations statements as future could to based actual and statements the and from risks assumptions predictions, on a about future cause projections, in Forward-looking subject uncertainties. Many this current to events and factors and forward-looking communication. materially are other are

filings our Exchange today, subsequent the quarterly that well the Securities materially cause please issued factors to press addition filed report with with Commission, as more statements, information For the about in to Form factors report from as of differ SEC. XX-K earnings section we may annual Form release forward-looking actual and and company's results XX-Q refer the risk the on to our

to forward-looking should to reliance they only put speak statements over I hand Mark. Readers the on day that, cautioned not made. With now call as will be the undue Forward-looking are statements. of

Mark Russell

a the overview an I'll status update on Indiana; Welcome on Project and of the Valley the with the in and which in manufacturing most development, you validation clean you some sales an network. updates quarter business our hydrogen call. expansion Arizona; was of lastly, I'll Ulm, we and After Resources, second recent and Wabash in and of service we'll Nikola the we'll facility our stake financial update, results, color give answer that some Stone XXXX XX% Germany begin second our Kim best to our after accomplished Tumim on what earnings quarter questions. with investment the Thanks your course, the of discuss our purchase Coolidge, with Today, venture update do Britton. you Tre will Capital, to joint and agreement during in our our an in progress provide of facility announced of

in We've component proving batch one of second the trucks trucks testing for quarter this the end from at here States. also now as systems be trucks the also This batch second various from validation improvements at came diligently working And and vehicles, process of incorporated month. manufacturing activities undergoing with are batch beta Validation the So, testing. commissioned remaining started that the these for grounds have fourth of completed deliver We've Tre this let's The been have batch grounds to from that pre-series Nikola in trucks beta six kick trucks that are in we're the the now trucks continue and to alpha then validation. in improvements own customers United the of the various building batch Battery-Electric of off of prepare alpha trucks. mature to By plants update. on the commissioning right of proving Arizona year. today. five second and nine around all gamma the we and first Vehicle Three we'll validation batch. Coolidge

moment, the anyone chain. at challenges is the biggest no our of supply surprise to One

Tre, situation a the more facing only shortage. global For parts And acute and gotten you the the material is Nikola XX know, days. has industry automotive over entire as the last

Our shortage cause these displays. delays to root earnings head parts numerous fourth fourth our And worldwide crash this of the continue the mentioned of integrated in ramp enough part aim components, as builds in our many our we up screens dates continue grow is cells circuits in our as constraints. particularly And overcome other quarter. in are pre and for of to chain have to the last for experiencing timelines battery vehicle and we're as And receiving diligently deliver delay, but levels testing the maturity and a other the result, pushback of to to to and is supplier quarter, point concerning a to team semiconductor previous suppliers receiving critical touch and chipsets. validation quarter, we And call supply for subject confirmation series trucks buildup accordingly. we working trucks common to XX as units, sensors, critical

these year. the result, due accumulate customers for in we receive deliver roads quarter, XX early dealers miles saleable, not those launch and we've our December electric the to critical time. third the trucks for cell not five the cell be in and them there. to end is will half start Coolidge, limited and we'll trucks saleable year. there with in the Los technically Germany two vehicles regular alpha capability public still of We're commissioning in substantially by quarter, is manufacturing in vehicles these on being but validation are Meanwhile, fuel if may to pilot this fourth start enough do This The a the units built Tre build, and own still a between to production or by to As being in in and to expect conditions of fleets, freight fourth even needs the these planned available place to fuel prototypes encouraging up Hydro of for moment, customers. release runs second select got road or are Phoenix those Ulm us components not fourth targeting units followed vehicle in of by vehicle What box to within on at quarters trucks, XXXX. components even under them our use of to Angeles demo the this complete Tre

the moving two XXXX. emissions fuel was now facility, manufacturing to calling XX,XXX tooling part nameplate cell automatic alphas. commodity venture the Looking cell plant, still our building Nikola building And to received we're Germany, assembly of line point, as trucks, XXXX. significant Valley funding Energy, and phase which for plant bring as scale And carbon vehicle currently carbon production first half incorporated range there builds of and Phase very quarter will planning, production Phase with our And hydrogen Nikola expected clean first there. in calibration. geologic purchase West five been January This the gamma modifications storage XX also Wabash The And Things ultra the second forward joint On government vehicle to be Arizona capacity clean sister X,XXX the is Greenfield on now battery and first that X the a of the into converted project, from first with with there on hydrogen underground. we've where and carbon resulting long industrial stored on quarter we're developed are start to similar they've those vehicles Nikola program. a coke five, we and there. operated of point seven the battery world completed of we we year out facility hydrogen, have permanently facility a jump expect company concurrently our and IVECO for build undergoing sustainable the Phase. we'll of we currently petroleum class will of area. that Department expected The of is are an gasification in And per then, June this expand pre-service the to The at pleased new that pre we're speed, its Coolidge, units we'll end capture industrial assembly in area, facility the this fuel the forward and Terre XXXX. the to Valley guided create to Resources facility originally Coolidge. our addition we're Indiana. been sequestration. equipment the production fourth at Resources look X and line We're it currently vehicle building electric XX% of in all XXXX. next up the and builds And from Tre by facility, the complex electric out biomass being typically this Haute, heated the of installed reference interest ramp in two the we begin in Tre on the electric and phase being are capacity quarter XX, as the by deep recently to the year, assembled. the have And an that Wabash in beginning year. announced of or battery of of And of end complete the being use

can projects. can for stations, may system onsite hub in or target agreement value by to will enable of areas especially electrolysis hydrogen electrolysis. also to at WVR Columbus, explained, The which and Maryland. agreement XX us you hydrogen XX, customers July quarters. from on is miles previously and about see three favorable the Midwest. of hydrogen and locations, throughout competitive even California, Florida, pave announced customer tonnes locations will the we cities, helping sales hydrogen service our conjunction dispensing quarters. our New the dispensing below per where as diesel, electricity about made in offtake centralized is Arizona, XXX than Louis, adding Virginia total announcement of location you available as be on Chicago, goal to As Wisconsin, Tennessee less The based now cost Delaware, cost The to St. corridors. kilogram, It's up per an traveled an we well coast. other Milwaukee, offtake map see Illinois, sales the And talked previously production from spanning an rates which coverage clean our truck we've in how hydrogen And Nashville, talked of our example coast XXX at our fueling service and we network, that within the we're hydrogen of among with the and to highly previous production affordable with Colorado, in Indiana critical we've a of not hydrogen we and way generating for On WVR agreements building have a offtake XXX. from previous map. there In in an of way Also XX, XX out involve provide April, and at including us can and streams. day leveraging of $X our Ohio, there then Mexico, to major locations, expansion Texas, rig number of Missouri, provide spoke efficient And Slide additional on geography ultimate

now of collaboration on with power agreement are building with needed keep remainder support we of of going network of our and It's map. the the importance Uptime customers their he'll critical which ecosystem. with expansion the are fill with lease utmost offtake service And and allow the hydrogen sales that station Kim, to service and customers. blocks We our on Along are locations, and be to this will and the the it out to our their expect America, road. announced and on I'll to the the service to of network us additional vehicles working the constitute latest travel for centers reliability over and to numbers. WVR their will trucks go sales fuel agreement provide bundled operations. the maintenance pass

Kim Brady

and Thanks, everyone. morning, Mark good

agreement I results, agreement to The Tumim price, LLC. the color like gives to X% agreement issue to Stone quarter but discretion. the million us to Capital is minus This on provide liquidity. to additional going some with issue Nikola's at market XXX of obligation stock Tumim would right, notices allowing minimizing stock Nikola to Tumim with common a and strong liquidity our solution, us Before not flexible our second over purchase dilution a our our at The of shares sole the when discount up provides purchase our shareholders. to Tumim prices with

QX And negative stock-based EBITDA on EBITDA service $XX.X connection one, $XX.X normal mobility. results. million. million on totaled $X.X items, and basis, $X.X our compensation; to among excludes, XXXX, million regulatory million loss In the non-GAAP professional $XXX.X million. Moving legal second $XX on short other on September was five, other and from Hindenburg in Adjusted warrant incurred loss quarter, adjusted net two, matters a article fees depreciation and with million seller amortization; four, the in revaluation in of and

expenses $XX.X and and trade The $XX.X million, of second million, building, million development consist battery-electric including cell expenses including trucks. compensation mainly cost. and is Nikola and in of validation expense. $XX $XX.X million fuel were $XX.X of and developing incurred compensation were legal costs is research quarter SG&A stock-based the R&D expense, approximately million regulatory testing, stock-based expenses

rapidly XXX our a as engineering, and manufacturing and headcount total our energy. XXXX, at in growing teams continue is XX, June of build we was to As employees

the to cash $XXX.X cash with and We of quarter million Turning equivalent. the sheet. ended second balance

We XX as have obligation. of from our headquarters outstanding aside debt no June lease Phoenix

Our and are and shares with loss private and our million. million second capital stock-based $X.XX. Coolidge for production. trade $XX.X We and equipment loss Weighted facility, legal of of per average share and GAAP per net expenditures quarter liability comprise $X.XX. to Non-GAAP basic both BEV million revaluation warrant and the the diluted the approximately diluted shares share second tooling $XXX.X totaled loss was Basic net investments outstanding. the and XXX supplier related quarter matters. for manufacturing quarter regulatory ended non-GAAP in year-to-date approximately in of was share Basic Greenfield were per net loss and compensation; excludes on construction diluted

expense our we be second continue For as the focused on managing below plan in and to we quarter of disbursements. XXXX, came cash ranges, laser

and battery to paying semiconductor the if being prices lead components, ensure shorten and we higher in sourcing location including aggressive cells However, are possible. and time, deposits our

million range is $XX of compensation. Now, $XX stock million, turning the based $XXX which in QX the $XX Total of Estimated the million, to be of is expenses including to our to to $XX range SG&A million XXXX in Estimated million, will which stock guidance. million includes expense. $XX R&D compensation in $XX million $XXX million of compensation. operating million of range based based includes of estimated $XX stock

are Our $XX million anticipated $XX capital third the to expenditures quarter for million.

guidance. XXXX year fiscal our to on Moving

available components and As semiconductor vehicles on of the may receiving saleable Mark XXXX. date previously until discussed, vehicle depending validation C-sample and be early testing, not subsequent

with of $XXX $XXX guidance compensation. Accordingly, XX million from margin may no $X to guidance $XX gross to delivery XX same, to to freight to dealers not anticipated roads, the profit million $XXX million, of we are guidance be of at due saleable, compensation. not vehicles and XXX expense some of the million R&D pre-series intact, the million, SG&A to guidance However, we intend place revising gross approximately to $XX these at in we revenue may upon build million Because guidance and desks able in could guidance. $XXX hand based revenue inclusive $X changes. million to if stock vehicles. to XX approximately million $XXX XXXX, trade delivery but the million, our customers remain delivery vehicles, improve The decrease recognize $XX our to the of will mainly vehicles be of million. in by public on range And Total for for demo X.X possible. truck to stock million QX $XX from hauling of million inclusive and negative XXX% based is remains remains to

million. to for remain range the fiscal of the Our in million unchanged $XXX year $XXX anticipated expenditures XXXX capital

Our and electric hydrogen include capital manufacturing phase tooling, associated supplier Coolidge investment manufacturing engineering plant infrastructure, and equipment, fuel one cell plans vehicle equipment.

is Our range raised, $XXX the the year Tumim rights, exercises cash capital full Nikola at anticipated if million. million $XXX end, balance to million ending in $XXX and no additional purchase is

end XXX.X two, shares exercises; stock Tumim full option for issued of total employee weighted approximately XX estimating three, million Capital estimated one, the the purchase includes: of at million. December restricted Stone XXX This to the XXXX year estimated notices distributions; ending and shares stock unit about average outstanding are We and XXXX LLC. of

that will plan fulfill we coming hiring in quarters. our We the expect

Our roughly of the FTEs. have XXX is headcount of as we employees XXX engineering By manufacturing approximately end July XXX employees. should employees, of XX, comprised and XXXX, X,XXX plant corporate and

Deliver to commercial We fleet centralized continue customers infrastructure customer Nikola our first concludes ground public We and/or freight. ecosystem roads, station look following challenging hauling prepared partners. to forward XXXX. forward our supply milestones additional achieving move And BEV in This as and business our and use testing, execute for and constraints. and hydrogen facility plan dealers hydrogen chain hydrogen additional break on Tre despite pre-series now production the announced remarks. on

line We will questions. now the Operator? for open

Operator

At a Instructions] this first Our conducting question comes Chris McNally your question-and-answer question. you. Thank proceed Please from time, with Evercore. we'll with be session. [Operator

Chris McNally

much, gentlemen. so Thanks

So, questions. two

in really I the guess, the and room the Trevor’s know, first is elephant You on lawsuits.

Nikola, the clear made. was a in think, which your question person I is But positive development. So, investors, that management it's majority when current and is company, is statements get questions these always from the were to we around not of against next one Trevor, obviously obviously of lawsuit the the

that line of, that I think best Do the of -- started questions, out Hindenburg guess, question I knowledge, off? of the guess, investors? sort And report, how came your statements all what you is, of So, answered know, you the first that, otherwise? my said questioning would which you've answer maybe, other – you to

Mark Russell

up first. it that I Chris. you the elephant an Obviously, in is And bringing appreciate Thanks, room.

involve against And against or those, nothing the and the know that anybody through mentioned, at if read you see all personally, mentioned in nothing of said said the recorded made As you'll filed. And by indictment. company Trevor, pages approximately that or the personally. Trevor they you company else by statements are charges was Trevor XXX

So on potential focused delivering on our out potential we're distraction. is on there. focused distractions for the very everybody to forward. you. job we our And is a objectives This milestones overview lots There's going of that just keep

Chris McNally

Okay. clearly development questions second the on important one then business of the maybe, -- Great. other for to investors. most And

after of who's to buy to actually what of You you building the going know, level know, EBS them, and progress that is, demand.

by could expect to for customers, see, orders launch understanding would We – the ordered deliveries, the additional year just opposed so launch we of how idea of what announcing about talking an order vehicles have about again, an to year. order customers, talked the as launch end end give batches? is on about size the broad X,XXX, of us book by maybe You've are you this the under of we to can hundreds

Mark Russell

not any them only electric TTSI, and And hand the – asking or do nothing risk doing for and Thanks, taking to cell, and of Those going very not any were announced place current The raises around be Chris. a is the both We're And we're question. in for vehicle. us. us, like announced that in is battery development customer launch we're for is fuel customer of behind which going reservations anything crafted work with share Busch. for with carefully agreements, cases. take have customer, Good course, we Anheuser that current BEV to contracts – the to the they trade contracts. like We're TTSI. to for that, course, relationships

we'll mentioned, shortage. and this accumulation in we in completely part of with to TTSI, validated of components because spite start we vehicles mileage as example, global if need chip they're delays dependent even place For receiving because not

we're careful to They're on So quarter. customer to hauling have miles road. to fourth get we starting that. loads. we're the going very But to we in with be And who going accumulate going partner be the on trucks

sign everybody Beyond for interested is commitments one. is ever like with broad-based we've that, customer to now But are trucks in focused and relationship, and needs everybody major Pretty and to take evaluation, willing willing every is said talked who much partnerships these customers, we'd make trucks, long-term on these us. before, what we're that to trucks. I've

be announced it's we the that evaluation, order further, disclosing be likely in small because on very and be list Class America, that working them before North replaced. publicly on to there's front X long. nobody's the million start that, diesel And will who's Europe, there's to trucks And opening-up amounts book, on going road for X new all Remember so in if more vehicles. taking, we be almost of and going must

huge that is the So in for need undertaking and produced quantity proven massive. here is a be is that can than we got the truck

So saying proven support they wants Everybody in here. you zero that we're that's the That's That's there going pun reliable, customers if ecosystem in an partner one the and that trust that's us the do, we demand. for can are intended. some macro here. and with can when years. building I'm they here. what What can effects is our have on on can that's many objective trucks. we on No not Everybody want so long-haul it them. We're that But on service We're needs emission get over volume that building. field. rely building sustainable, and that's

not rushing is got trucks the producing first, So in we We're our We further produced We're these to – in announcements. take near-term. in hands. actually things. we're these we've you'll of what slowly. need pre-series, And at ramping any do line dealer volume to plenty customer got now, see assembly in and right of give trucks people not up hands

most do own their likely dealers be like customers of most of own doing their Anheuser-Busch. representing and customers. the respective deals in purposes smaller then for more they'll be them run we'll And geographies. they'll to will dealers fleets. their And their most Our TTSI do more for run And us then, our deals demos

those come produce a quarter, further all home. trucks As fourth on along now, – we have we'll that right forward, as go And will the deals out. the further things in announce going going

Kim Brady

backlog, that. disclose to in order we by intend a that the Chris, this we that to of will book our end do we position be mentioned year, and previously

there in dozens And major other are we blog as announce that our As of order with as be start a about, anticipate now. we where sharing respect customers, to conversations well are book the that in with should electric going alliance can and we position battery customers we continue Mark to as talked QX, that truck. customers,

Mark Russell

customers in on track facilities. getting -- chance They're and the review trucks. they're validation to They're in us the with everything We've test us. seeing getting trucks, a rides many had with the

great have let We we'll bring on. those conversations them going more you about customer know and you to And in due course.

Chris McNally

Thanks.

we And the basically, be you're end the by sort find basically out but just Europe then costs development paraphrase as maybe which of customers ecosystem. something next real customers on the primarily should the to backlog, arrangements and they'll is expect of larger the looking as start sharing year, term quick, focused the about for selective, last, US long we'll launch launch where will be for those year. And

Mark Russell

That's correct. said. That's well all

Chris McNally

Okay, thanks.

Operator

question. comes with your question proceed Cowen. Osborne Jeff with next Please Our from

Jeff Osborne

guys. morning, Good Yes.

back assuming end. the that I quarter? that Just go is exercised on a talked burn? XXX about? -- the my Kim, current talk the for what Can that wondering if is about And then of can burn Is that the end? assuming all you your is capital rate questions human was couple cash by we to just to XXX you

Kim Brady

question. great a Yes,

CapEx in we activities months QX, million cash about as operating the well approximately months, from $XX from average operating six three when For and months, burn, between CapEx around activities, both $XX about as think think the first and for we we million. three for first first

with As CapEx the you respect were know, first favourable in we half. highly to

all capital, that in with respect approximately that end confident remain forecasted. we ending we guidance the year, our assumes will rights the And million $XXX what -- main half the as OpEx feel to with we we the And currently pretty CapEx of have year, and stated if we of of anticipate end same. to they in the two CapEx we so XXX respect of about And with changed to by then -- have increase. what cash. our exercise $XXX second will our not the is And well were of terms to of so cash as then all we'll foot million have the

Jeff Osborne

you having quarter, Mark, update and that deliveries those? start FMVSS to compliant something with then, in can that that can Is have so Certification? or on And it. Carb before you us a the Got deliver we fourth you'll where fashion you could prior are

Mark Russell

working certainly there. that. of the and regulators deliver as we're prior the can. fast that, We timing course, bureaucracy we that the partly and as But with to on working of depends And the we're on

So, an exact working we're that everything date But in I rapidly. can't can't place. give I be all very will you when on

California. As you the range and know, combination, cell California is the vehicles. in fuel in Arizona geography California will target launched the launch, for case or of Both for both vehicles us battery be a long trucks.

Jeff Osborne

Just to follow-up on that.

Mark Russell

So we can

Jeff Osborne

to interrupt. Sorry

Mark Russell

ahead. ahead. Go Go

Jeff Osborne

the want risk the by in where is you get certification any to delivery? fourth people won't elect quarter, for until that, don't you're that that credit they there carb on that the follow-up take to to event Just certified deliveries

Mark Russell

and haven't point. don't trucks at in heard that I anything wants -- accumulation We this we the road. on we No, mileage want Everybody the need vein.

let wouldn't us. we So stop that

Jeff Osborne

I Perfect. Thank That's you. had. all

Operator

question Deutsche Rosner from your next with Please Bank. Our comes Emmanuel question. proceed with

Emmanuel Rosner

I quick three Hi, good have questions, morning, I if everybody. may.

these give little to -- that using improve? what it these are -- first that for components The are detail mentioned one, that surprise And of right you can some potentially. can is you source testing use missing, is the difficult what -- are to prospects the now? Know possible to how trucks a for more around critical

So talking of I guess sort what curious about? we're components just

Mark Russell

The ones that we're worried most about are chips. the dependent ones that on are

on fully OEMs. production from those validated as displays have and most need heard In as you might cases, those to there, don't the ones we around -- time of other things for most not the displays are example, touchscreens, for electronic operate the we truck, about. just -- the that, that like mentioned, as the versions components, of be world all -- because because not as that's So sensors, all components, delayed the worried have you've some we we're the validated we of everyone, you --

and they of them a the they -- to case, And number titles. places is vehicles trucks, like But today that looks finish than private good drivable, that on we on official that XX so on terms facility. mileage these mileage accumulation test so in be accumulation transfer in property, can our we validation. we're be it they're testing chance that believe track part. until put then in they're saleable. we can't can't own But completely be the going here able facilities to other we'll if VIN of won't get them single can finished for track will that we We saleable. every But We not where or at put mostly built just there's all usable,

need accumulation we road mileage load. public we with customer So

for loads least road not why trained purposes. to or them then to Even customers, immediately. go vehicles with we're them use going as with fleet, take or get if the with in And driver. place drivers, we're can title, accumulation don't our one we who driver have to that's dealers, our going who demos to -- put in So trained are mileage our own willing own get TTSI is their their select they at dealer on

them be retrofit point, at of would we to arrive. point. title become that saleable some will the trucks that goal And parts then transfer when probably those Our can at

Britton Worthen

improve can doing critical lead perspective sample until display. not would trying are Emmanuel, as -- late There time. arrive key unit and price, higher that to we as components vehicle head be are as well alluded we likely will that everything QX pay earlier, two to we

in to And can have components, So may Final it saleable terms Validation depending on to that January of we that test. validate spillover before testing of means what will and have is vehicles. we arrival the and those

do as And can. we bring is to that so point, sure suppliers trying as are accomplish actively with At confirm chip to what we we're we make we but that. working forward that this can much that, cannot

just that's that production. purposes the do there substitute a then available. engineering and for for be case what in and that screen screen put we'll So truck is we we won't a put screen is in not operable, intended But the

Emmanuel Rosner

important discussions maybe and another the have had available batteries may that I of around of any next supply us focusing you that's Okay, and June some conversations may be think give the in batteries, you you around at mentioned component, sourcing supply last Then secondly, not the the great for how July update or detail. progressing and to on constrained year? the these for sense for XXXX. are extent battery Can what you

Mark Russell

Sure.

that QX, mentioned allocation confirmation received we cell For up think to for trucks. we I XX previously battery

up should we of other issues. in to component have so pay having supply than capacity not terms And build trucks problem

than well. for recently more in time, we talked X,XXX respect negotiations And Going at terms as committed are having with could our supplier, still with are will discussions And cell what battery going cell cells. have last approximately you about, to we this XXXX. that tell receive as battery XXXX And challenges have where vehicles. to cells. and source the one likely we electric suppliers, XXXX, battery we year been significant working have we through and you next relying we battery are, of And on in obviously, I negotiation battery know, detailed those just we battery is can started potentially

Of we're by this not at have underway for course, of that while time. end a better this have well will we QX I procure have time, you at can of to terms what enabled we XXXX, idea ultimately any in guidance, we revised tell

terms we have that by we in sign. the we And confirm know have we been so confidence should that to But qX will of once agreements able good and end be have we in reasonably much again, to been a better reasonable what position. long-term of able

Emmanuel Rosner

And the thinking capital Or additional race, up, sort summer about is that from and later the back in think you're a very guess like the the year? what $X just little ramp optimal, to of slower or it? still is immediate million, sort for can is on enough timing about just to That's way bit push Kim, Okay. equity of this how then this, like like is update the the finally, the then you us helpful. I

Kim Brady

as that, about Sure. always us have said of you that we a our we are solidity X been runway. equity thinking clear And Having capital, constantly that longer this is know, something have do flexibility, million $ that about, intention the we offerings. line so conditioning for being raise something of And follow-on capital back evaluating. convertible that market we're that to That's when additional market, are as evaluate there to well as one, go with out market. we respect equity obviously market course, and factors to many gives debt

price also now, know, somewhat to you our timing right respect as sure and weak. stock Nikola and make possible want with milestones, We as to much that to we try is the the optimize as

as of so the that potentially Right as is timing. think the looking that’d end market. our to about we're definitely consider go still at that's the the not even market that of in for. second now, year, or current QX, on something And we be of our intention to has changed half now, But thinking out the whether towards we'll

Emmanuel Rosner

Great. so Thank much. you

Operator

comes question. Markets. Spak Capital proceed Our with Joseph your from next RBC Please question with

Joseph Spak

just morning, Good of point Maybe Thanks. of another here. sort everyone. clarification

the You this year. previously talked of later trade about BEVs delivery

change just Now maybe you're talking about -- seems change. parts. the non-validated you sort about there, that, the -- perhaps like made are here? just sort throw Are in maybe there's always talking case? that then that guess lawyers the changed calling this was the like they fully, deliveries, the or guess I of, you're defined But really is vehicles what And that of delivering. the that's in is And pre-series, because want understand language new language. and some I it Or prior some I get that that's is the I that those actually really

Mark Russell

on saleable off are be part distinguish when them, they're That's trucks validated, we're between to that and every we'd -- that completely because are we lacking then and one is If that parts number, or those exactly can more there right. looking and sign trying validated. fully

that's at So, to it. exactly how look

assembly -- not We regular the These trucks are saleable. and they're designed -- facilities. for But are the series line the may they be this not as is production. regular

until so we officially pre-series And saleable. are them call we'll

Joseph Spak

to those XX or are the trucks? pre-series XX But are the older finishing saleable

Mark Russell

pre-series we until make trucks. that we be or we until -- into so. some the parts, we potentially if maybe able make be get saleable will of won't know They But to all them may can turn

Joseph Spak

Okay.

So, change, some pre-series, XX XXX, the was XX XX before on of those just to that saleable? it to be to saleable hopeful now clear then although different it's you're

Mark Russell

we And That's the have right. facilities.

have and We to a components. But lack lacks the going we're head most units touch few. of the The will very the least screens.

Joseph Spak

process somewhat guess, -- the guess, what's I adjustment I mean, others, still these And prototype. on are I

go order. refine? process you then of here? And and they testing, Or feedback? larger So, they is if customer want like, give they and can sort you the decide sort this Do they place back into what's a go of to then

Mark Russell

to have have No. straightforward have prove their it’s we of They that. to actually. testing everything component, pretty they including vibration; the requirements, that all it meets specified. own which to the like And do durability, us shock,

truck component would the put to from we and and its the include it truck the truck that at supplier have that the to has testing component. the that in So has then the validation for meet component level, to the of and in specifications then be

so then truck. component, them to why from get and mileage is the we'll us. what for fully it's -- that in have but -- that That's we put late, actually it accumulation important So tested test their

get of to such on that we usually then, hours. test, case that a actually and only extreme can the test enough that a get track, We reliably truck test in or -- done can edge the corner replicate conditions be have And an on to we have case track. on only that have is certain use, it's because

here. And constraint the so timing that's

became going As because be assembly this -- components put fully of title. master we line to mentioned. short to trucks of the and ton we than this have was my a transfer of was customer lots it chart, There's past of three to with XXXX. I've -- shortages, is worst will back by right into all bad, holds to of The shortage certain apparent. time around -- the these that too. to last because acute There's other stuff go off just possible Gantt planning experience even And career dates it to to be go now. think in in than those faster close the if turn decades able over saleable I This it shortage certainly seen were hands, in we're And there's now. it

want a everybody very and want based recovered quickly. now. Nobody to situation suddenly from anything July placing turn I But it then think. these future. -- XXXX, That past everybody we was it in orders. the on has was back When this knows turn the think started it rapidly. everybody came is opposite In think, case, shutdown from you often back nobody collapsed everything turned, And I experience, when the shutdown, suddenly went see I rapidly. could demand where the things being

Joseph Spak

guess, like all I Mark update of touched sounds of to XXXX. Okay. sort And year, this then sort or Kim, this. both you on later you It us better for be

industry. admit you said and you're Mark, changed, long appreciate term company haven't really what already presentation to I really talked is that has what showed, the below the still decade both is, I also better initial guess which But think I want you the willing fair. much deal consensus a I ton at those those understand is great. And, think is to targets. I mid well opportunity about

or believe there's that if is reasonable You it of assume But to different. demand. slope still a the seems that is true, path the different, lot even is

willing you on update are or us mid-term when targets investors can expect So update some on to those an of that?

Mark Russell

timing, of too end that terms year. in early. Well, to I this do definitely still but know, want of towards about will you as we XXXX, the talk it’s

progress. have making we good active allocation as we’re to terms in next give still for year. And what right in we're because share QX we not procured idea we that critical may to we procure us better now, with year, for a complete we're working ensure in down, need. will not fully prepared somehow able have QX negotiation is But what have allocations And we components. do to hard allocation earnings and and respect much whether calls. But next are of updates components active in as well for slow about we we to will final While you more we're that negotiations,

Kim Brady

if XXXX, you're further out about talking And XXXX.

Mark Russell

Yeah.

Kim Brady

even of you're anywhere that's not changing the dates The back. bans met and combustion but we're world. of about; in mandate XX, engines Europe being been those no, must have jurisdictions and North push that of talking geographies, America no hard announced pushed to no and on There's are other outright numbers change, places that And internal be out those. what in in none

So ramp the can what up. is, us people increase faster, this like we just pressure up to for once does ramp

term constraints talking So have term chance to ramp believe about. then these and near overcome a were still short numbers we we the great to we up

I than higher, deadlines we can that be on be able meet fact, than to have it to pressure will the are looming. we push -- to the faster think In us

Joseph Spak

much. Thank you very

Operator

Peterson question in comes next a JPMorgan. Our question. line of with with Bill proceed Please your

Bill Peterson

will constraints? starts you? at you realized stage? Yeah, you're telling moderate Do my lack the morning, supply some, get suppliers? Starting here? Hi, think are to a maybe this a Or I maybe come even from and is but better a to like And What at these thanks when kind sound this you taking the of of they back questions. your and there's peek constraints. for it that having uncertainty this with good of discussions do little in all, bit And constraints to

Mark Russell

the doing a let He's for it -- I career. said suppliers. the my is I'll this have supply managing said I But everything as talk Kim, else right with now about and specific team. and in great expediting, job. He's I -- And as personally, before, chain worst that seen

and it's it's for and how many is, it's didn't in an informed, informed is, because unprecedented it So it little think get parts, opinion, I made we have how yet those And other spreading that appears now case, bit that expect, -- acute it sense, delayed widespread that, a people hard a to and be how is, to on -- parts. official a and really how, hey, just have you nobody's We're that bit. know, right in components in the say, may of be I'm the just we having people little parts pretty with vehicle. run closures and so mill it all going mill when bad that the But having it do and in These nothing are you that turns. things parts, with stand know, these to to you get have just to have that. experience, chassis like like innovated and seems run like it's the aware often it's, as do other things of frames my that of, we that it more but when are that, can't

it's know push going also also I that you're see everybody the that is to around scrambling people -- know that, starting as price. and world that you reason I to the is So as And can. fast get because they better

Kim doing before, price So the else world mentioned in the is thing. try we're we're as seeing, same everybody using to supply to get

on And and so the they as of demand going of everybody's scrambling what than to later. this be get if supply true still they sooner to law do more to it's planet, as Because how make fast money. addressed holds they're then make because to rather make, going to that's going can it's

pretty And things. people that capacity. expect ups people certain The longer. fashion. don't those turn. the think actually and COVID additional in when bit parts be might for up us, not who a And -- little down that just lead happen that is will factory with I sure an have long-term, time And estimation for you for the I'm for quick. see have they for So old like catch to to can't needs to overnight, you're demand additions got take going caught not it orderly parts on have that to rapidly. I new shut capacity happen my improvements depends capacity coming will But ramp people often actually, especially, the line those to the back, add pretty have it

chipsets we're battery So like capacity, on require that might the that's things focused and why additional cells

Kim Brady

to components. you you about better cells two notice in materials terms storage it's semiconductor as of comes Mark we battery as the And there better major getting six and seven cells visibility categories its are not know, it of talked battery that although are indications, clear When complex. And cell manufacturers.

three are they're capacity. We add they're trying to all they years and scrambling. that demand I by in know the likely next surprised all think out,

XXXX a that's active XXXX. things now, it suspect but make cells suffice think chipsets, where are about right XXXX to needs we issue lot POs discussions to for XXXX. and going. we're have what So we comes demand, XXXX will XXXX is we of When battery for by of and XXXX our for to for look and trying we and all able been sure And available better, timeframe, much as that have

XXXX. by that this While some component a are manufacturers, perhaps references large last until challenge could semiconductor there

there are of by indication that things improve XXXX. However, end some might

we on key be challenge reasonably already need. is placed XXXX components our are be of that we based But have hopeful that able allocation that at once for confirmed. again, biggest addressing We XXXX. will receive this will semiconductor point And and to really POs beginning critical XXXX,

Bill Peterson

Thanks the color that. for Okay. on

just and like and go expected you service, large update You you finally I this terms related like I and guess expect then to XXX on do guess think how network And partnerships you service Europe? in that? can how about in the you us partnerships and do I sales guess, of how agreements guys an covered. And you're in chunk good sales the how looking say a grow I your have give And the or economic US service US? share here? incentivized? announced to a how further would channel you helpful? be have to of the and think between lot are guess your guess it sales XXX any can and map, Nikola color at economics, are provide partners sales how guess of the much service I looks to and this? have fast -- channels have locations, I expect I on these you they to

Kim Brady

Absolutely.

at question areas first increase where in marginally this coverage are good us as in try are you'll about covered probably starting critical that's geographies Three map, getting coverage see So, on the your uncovered, the critical We'll our are we you probably see short-term. is the can geographies. only coverage. that critical with in point. Yes, some also -- focus to

see These year getting filled And think do two. an that through extremely generations our uncovered is critical been focus who I US orderly fashion many maybe market We and place have. But that over is their successfully capable So, dealers the parts is, in next us long that to for cases. few cases geographies several in. long, dealers. in us a the you'll the have our go to to or in of are time, in next most quarters, map in for intend

the So, they they have helped customers they're known to are fact this great with they have infrastructure, trusted with currently going great relationships and by happy be really transition customers, that And those local their are about customers. they're dealer. servicing

for to So, and a get dealership OEM Europe, dealer in a would earn paid and similar we'll approach incentive selling from market they other and very relationships dealers. are see you at an -- it. that go that really to get through truck relationships and dealer, then and the that's our they supporting We're for money between servicing our good truck. taking And same they they're how exact their some

We dealer some dealers. where we utilize because IVECO existing use Europe, in have to throughout of in an IVECO have we're the IVECO able an We're many able to geographies Europe. dealers advantage as choose we the form has that dealers network outstanding in and

and partner there a network. venture so existing dealer their built-in-place relationship And there, we've our got over with joint

you Europe. we in IVECO leader alternative those Europe, Europe. showed markets major servicing in to the coverage of already they used vehicles, natural IVECO vehicles have fuel in you gas are very because the in the see And if the dealer good powered supporting So, pretty in map importantly, dealers network, and is

the zero. with and leader And now going which and it the So making IVECO us led to be lower transition, gas in natural they're it emissions already. made cleaner

So be They venting fuel, sustainable and to next diesel ready put the a have sensors those who's service transition are take that signing that through by retrofitting, of cell make to in service facilities Europe vehicle by already for towards service And modifications have lot to made they're in be dealers able they're works using safely. to bit are be dealers and able that step. up dealer in cutting-edge a them engines. cleaner, and battery dealer, ready of hydrogen some been network little to that the IVECO. fleet. we're maybe already a of agreed them done here the the service delivered. the do the market to some have necessary Most in vehicles. to North we'll servicing have electrical been And helping And time a that be are some only to those modifications when to America, There's vehicles a in

really about feel we good gaps more dealer of – So see in all you'll map. see on as us you'll announcements fill the the And we that.

Bill Peterson

Thanks.

Operator

Our next from line Jeff Please comes Vertical. question Kaufman the your with with proceed question. of

Jeff Kaufman

with of at is back those in hopefully, is the get not we're up very my sales guidance everything get think want and right XXXX, question. at the just touchscreens some point back for interpretation guidance this Is to And feeling there caught now. to reason or alter you to reason shortage you're in to I any in point your XXXX. forecast? trucks Kim, going I waiting on that much. Thank your long-term and realize that we're no go the to guess looking going I pushed to XXXX, the gets delays, at chip the

Kim Brady

our make trying QX. that to know, earnings respect try point. this And as adequate our have negotiate in to forecast with components. critical well the as QX. will and we of cells, you are we altering battery But as we QX call, to share in you better idea as a believe continue once have key will we to supply locked to and sure not in I be able We're we much all supply, at well And know, as semiconductor as in that again,

about because very about to XXXX this we're semiconductor fluid. sure the And greater appear we'll possible. be receive. the not you some supply then well to make things awaiting I assurance XXXX confident at to and as point idea better suppliers locked will that in, have confidence, why at information once And as completely be we have that give again, what have dates we as we're incentive And one point demand. are that have changing we'll components, once to ultimately better about of our best that is While able think confidence expectations, and shifting we a reasons been

Jeff Kaufman

XXXX, months? able at these right that something up And caught to by are point of the are nine in delayed dealing to Where less because Or catch look half the more the ago. and thought think be? Or you're chain hope at a and next you you I year right company take you'd supply know least be with, to the everybody situations to today, areas year fair six I If that's you Understood, or is the but were the biggest control second not. want out is where where to has you you in of Mark. now, up challenges at projects sit amount extent resolved. some there that Question control. on a I next the now are things for the you're the was for do damage that

Kim Brady

question. Great

First but that delayed currently to accurately people no the to last objectives choice you've of up and are I past because summarized, supply have we we're And all, we we're the outlined working to the have fall. once we constraints. us, where of because milestones toward generally, as have current intended And think -- trucks. constraints catch we're be the chain

that under everything progress So have trucks, testing validation the in the and in our good Germany facilities of and Arizona, service the on completion control, at the the we fueling, pace do the of moving building that's chart news master blocks move on to that infrastructure, the of needed is, the and support of the workflow. all is of that the and we charging

in execution not control. chain So we the we way some At what the that's But up about the then things where us knows up no that's it. when -- catch know constraint, that's are continue. lost market point, are And feel currently global nobody ground, when down control try when. in for will don't that to in done, need. this That choice, are that because world can I that slowing not good supply customers have things the make for we we is our to a that great but the and and describe

Jeff Kaufman

such capital and All Kim, $XX or right. at spent we'll some six earnings and more question. Hindenburg Do for anticipate through to Are million items? the others above next of you some release point this sequester that say that, we much of insurance expenses your XX identified related last you. to Thank of these to need other and year-to-date sheet payments months? do over how In legal the beyond that's about months recapture detail items.

Kim Brady

capturing also. always insurance. anticipate of the our costs what $XX do It's spend million $X.X then anticipating terms additional We of next D&O in possibility from months question. in And after tricky are. five that may million QX legal in Great the be in there local approximately terms of

in we go try will next project to are what consistently wrong, five be. been And continue might that we that costs But cost it And to don't so this our when down. managing because tightly. that Britton that is have comes hopeful months that the is something legal to we

Jeff Kaufman

of D&O. some this be then And through will recaptured

Kim Brady

Yes.

Jeff Kaufman

you I have all Thank guys. congratulations. and That's

Mark Russell

Thank you.

Operator

time, the comments. Mark turn to of the closing have over session. call Russell back At I'd the like question-and-answer reached end We for this to

Mark Russell

your in Very grateful we and support. your talking again participation XX you look thankful today for another And for Thanks. days. forward to to

Operator

today's This conference. concludes

You lines may you and this time for at thank disconnect we your your participation.

Nikola (NKLA) 3 Aug 212021 Q2 Earnings call transcript