UPDATE 1-Nikola posts wider third-quarter loss after recall, sales pause

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Nov 2 (Reuters) – Nikola posted a wider loss in the third quarter on Thursday, after the electric truck maker suspended sales and recalled its battery-electric heavy-duty trucks.

The company in August recalled all the 209 battery-powered electric trucks that it had delivered and suspended sales after an investigation into recent fires found a coolant leak inside a battery pack as the cause.

Despite the Tre battery-electric truck being recalled, Nikola said it received orders for 47 vehicles from a dealer.

Shares of the company fell about 3% in early trading.

Nikola said cost of the recall and repair is expected to be $61.8 million, which includes the cost to re-engineer, validate and retrofit trucks with an alternative battery solution.

“Upon further investigation, it was determined that the compromise of the battery packs was not limited to only the coolant manifold,” the company said.

Nikola, which bets on its Tre fuel-cell electric vehicles, said it has received 277 non-binding orders from 35 customers for the hydrogen-powered truck. The first such vehicle rolled off the production line in late-September.

It expects to deliver between 30 and 50 trucks in the fourth quarter and recognize revenue of $11.3 million to $18.8 million, well below LSEG estimates of $44.3 million.

Net loss for the quarter ended Sept. 30 stood at $425.8 million, compared with $236.2 million a year earlier.

Nikola said it shipped three battery-electric trucks in the third quarter, compared with 63 units in the same period last year.

The pause in production after announcing the recall is the second such move this year. The company had halted production in May to streamline its assembly line.

The company’s cash balance at the end of September rose to $362.9 million after it raised $250 million in the third quarter. (Reporting by Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)

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