Nikola Stock Plummets as Company Recalls Entire Fleet of Battery-Electric Semitrucks Due to Fire Inc
The stock of electric truck manufacturer Nikola experienced a significant decline at the start of the week, subsequent to the company's announcement of a recall encompassing all 209 battery-electric semitrucks it has produced thus far. This action comes in response to an investigation into a recent fire incident that revealed a manufacturing flaw.
On Monday, shares saw a decline of over 6%, reaching $1.82 per share.
It is important to note that this recall does not impact Nikola's latest model, a semitruck powered by a hydrogen fuel cell, which recently commenced production.
Nikola disclosed on Friday that an examination conducted by a third-party entity uncovered that a coolant leak within a battery pack likely triggered a fire that occurred on June 23 in a truck parked at the company's Phoenix headquarters.
The fire subsequently spread to adjacent trucks, leading to the destruction of five vehicles.
Initially, Nikola had suspicions that the trucks were intentionally set ablaze as an act of vandalism. However, it has since retracted that hypothesis and now states that external factors or foul play were unlikely contributors to the incident, as indicated in a statement released on Friday night.
A separate truck used by Nikola's engineering team encountered a similar battery-pack malfunction on August 10, although prompt intervention prevented the situation from escalating into a significant fire, according to the company.
In light of the findings from the third-party report, Nikola's internal engineers identified a component within the battery pack, supplied by an external manufacturer, as the probable cause of the issue. The company is actively working on a repair solution, which is expected to be available shortly.
During the repair process, the company is suspending the sale of its battery-electric trucks.
Nikola is also implementing remote monitoring of all its battery-electric trucks to detect any indications of a similar defect. While the company believes the risk to be minimal—citing only two instances of this problem among the more than 3,100 battery packs produced—it has advised operators that, if the trucks continue to be used, they should be parked outdoors until the necessary repairs are carried out.