Nikola Interim CEO Hands Over Reins Early After Deliveries Canceled
Veteran auto industry executive Michael Lohscheller to take top post
Nikola (US:NKLA) Chief Executive Officer Mark Russell said on Thursday's conference call that he's resigning immediately from the startup electric-truck maker that's had monumental issues for the last year.
He originally intended to leave on Jan 1, 2023.
Veteran auto industry executive Michael Lohscheller, who became the company president earlier this year, will take over as CEO.
Nikola shares fell 8.3% to $3.03 after the news.
"Since we announced this transition, things have gone so well that we are handing the reins over early. And Michael Lohscheller will become CEO effective today. That said, I won't be going very far. I'm still one of Nikola's largest shareholders, and I'll remain on Nikola's Board, "Russell said.
Nikola's woes continued, however, and the company said on the call that it would not deliver the 300 battery-powered Bev model electric trucks this year that the company projected this summer.
Customers who ordered the trucks are "reluctant to invest in charging infrastructure," company Chief Financial Officer Kim Brady said on the call. "We are better off delivering fewer Bev trucks and conserving cash."
The company also warned its fourth quarter margins are likely to deteriorate after costs for digesting its latest acquisition, battery maker Romeo Power.
On a brighter note, the company said it built 75 battery-powered electric trucks in 3Q and shipped 63 of them, up from 48 trucks delivered in 2Q.
Nikola said revenue hit $24.2 million in the third quarter and posted a 28 cents-a-share adjusted loss, both better than analysts expected.
Last month, a federal court jury in Manhattan convicted Trevor Milton, the founder of Nikola (US:NKLA), on three fraud charges.
The jury acquitted him on one fraud charge.
The court scheduled a Jan. 27 sentencing date. Milton faced up to 25 years in prison if he had been guilty on all four counts.
The government had charged Milton with two counts of securities fraud and two of wire fraud. The jury was convicted on both counts of the latter and one of the former.
The fraud conviction was founded in Milton's statements as Nikola's chairman and chief executive officer.
After going public a few years ago in a merger with a special purpose acquisition company (SPAC), NKLA's stock rallied more than 900% from its initial $10, as Milton hyped the then nonexistent product.