Nikola’s Latest Bid to Secure Funds to Advance FCEV Fails

But Delaware Amendment Awaiting Governor’s Signature May Come to Truck Maker’s Rescue
Nikola HQ Phoenix
Nikola adjourned its stockholder meeting until Aug. 3 after the company failed for a second time to win enough support from investors to issue more shares — a key step toward raising enough money for operations. (Nikola Corp.)

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Nikola’s latest bid to issue more shares and secure the funds needed to advance its Class 8 hydrogen fuel cell truck (FCEV) ambitions failed, it said July 6.

Phoenix-based Nikola adjourned its 2023 annual stockholder meeting until Aug. 3 after the company failed for a second time to win enough support from investors to issue more shares — a key step toward raising enough money to fund truck manufacturing, hydrogen production and fueling infrastructure.

Known as Proposal 2, the plan needs a majority of all outstanding common stock to vote for the change.

However, the latest stockholder meeting may not be needed. A proposed amendment to Section 242 of the Delaware General Corporation Law will be effective Aug. 1 should it receive the state governor’s signature. If that happens, the threshold for amending a company’s certificate of incorporation to increase the number of authorized shares would change from a majority of the outstanding common stock to a majority of the shares voting on the proposal. Should that be the case, Nikola said, a sufficient number of shares would have voted in favor of Proposal 2.

The amendment received House of Representatives approval June 30 and is now awaiting the signature of Gov. John Carney. The governor’s office did not respond to Transport Topics inquiries on whether or when he would sign the amendments into law.

Trevor Milton


Nikola has been having trouble accumulating the required number of votes for several reasons, Vertical Research Partners analyst Jeffrey Kauffman told Transport Topics, including disgraced founder Trevor Milton’s call to reject the proposal and the difficulty of obtaining the backing of short sellers and retail investors.

Obtaining backing for the proposal, and therefore the ability to raise funds by selling more shares, lengthens the runway for Nikola, Kauffman said, giving company executives — led by CEO Michael Lohscheller — breathing room. If the funds can be raised, the company can continue down the path to cutting costs and start making money on its hydrogen sector opportunities, he said.

Michael Lohscheller


The challenge for many companies in the net-zero emissions space, including Nikola, is that none had all the capital they needed, Kauffman said, adding that the world changed greatly in the period between plans being made and production starting. The path to getting to FCEVs was more expensive than Nikola expected, he said, adding Nikola is not out of the woods yet, but it has made progress.

Part of that cost-cutting plan involves job losses. Nikola plans to cut 270 jobs, including 120 in the United States, it said June 16. As part of winding down the company’s European operations, some 150 employees at various European sites will be laid off, while 120 will be let go at its Phoenix and Coolidge, Ariz., sites.

Nikola expects the layoffs to slash $50 million from its annual cash outflows, part of a road map unveiled in May to cut cash burn from $200 million a quarter in 2022 to $150 million a quarter.

Once the job cuts are complete, Nikola will be left with 900 employees to start production of its FCEVs, which the company said in May would begin in July.


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Nikola had 178 hydrogen truck sales orders from 14 end customers as of June 16, compared with 140 orders from 12 customers in May when releasing its first-quarter 2023 earnings and unveiling the switch to just FCEVs and a halt to battery-electric truck production.

The company delivered 45 wholesale and 66 retail BETs in the three months that ended June 30, the company announced July 5. It delivered 76 Tre electric trucks wholesale in the first half of 2023.

A fire damaged an undisclosed number of electric semis stored at Nikola’s Phoenix headquarters June 23. Nikola will not be providing any updates on the impact of the incident on the company’s inventory or precarious financials before a scheduled August earnings call, spokeswoman Nicole Rose said June 26.

A retooling of the company’s Coolidge factory is underway and plans to start production of just the Tre FCEV in July are unaffected by the June 23 incident, Rose said.

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Meanwhile, Nikola said July 5 it won a $41.9 million grant to build six heavy-duty hydrogen refueling stations in Southern California. The grant was awarded by the California Transportation Commission under the Trade Corridor Enhancement Program.

Also, a few days earlier, Nasdaq said the company had regained compliance with the exchange’s rules. The exchange had warned the truck maker in May that it was in danger of being delisted because Nikola’s share price remained below $1 for 30 consecutive days.