Electric heavy-duty truck maker
Nikola
hit a speed bump on the way to commercialize its battery-electric truck, the Tre. A battery-related recall sent its shares down in early trading Monday.
Friday evening, Nikola (ticker: NKLA) announced a voluntary recall of more than 200 of its battery-electric heavy-duty trucks due to the possibility of battery fires. The decision came after a third-party investigation by the company that found a June 23 battery fire at Nikola’s headquarters was likely caused by a coolant leak.
Through the first half of 2023, some 240 battery-powered trucks had been sold and were in customer fleets. Nikola didn’t immediately respond to a request for comment about what percentage of trucks it has delivered was recalled.
“At Nikola, we take safety very seriously,” said CEO Steve Girsky in a news release. “We stated from the beginning that as soon as our investigations were concluded we would provide an update, and we will continue our transparency as we learn more.”
Nikola also suggested that fleet operators can keep the trucks in service, pending repairs. They should be parked outside, however, and have the main battery disconnect switch in the “ON” position to enable “real-time vehicle monitoring and safety systems operation.”
Nikola stock was off 18% in premarket trading Monday, while
S&P 500
and
Nasdaq Composite
futures were down 0.1% each.
The drop cuts into some of the big recent gains for Nikola stock. Coming into Monday trading, shares were up about 154% over the past three months, boosted by orders for Nikola’s hydrogen fuel cell-powered trucks.
The recall doesn’t affect fuel-cell trucks. Nikola plans to begin shipping those in the third quarter of 2023.
Wall Street will weigh in on the recall eventually. Eight analysts cover the company. One, or about 13%, rates shares at Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target is $2.70 a share, while Nikola closed Friday at $1.95.
Write to Al Root at [email protected]
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