Nikola shares tank after EV maker recalls its battery-electric big rigs

Electric truck maker Nikola shares plummeted Monday after it recalled nearly all of its battery electric semi trucks.

The company recalled 209 of its Class 8 Tre battery electric vehicles after a third-party investigation found a coolant leak likely caused a battery fire in one of its trucks.

The company said Friday it has placed a temporary hold on new BEV sales until a resolution is in place.

Nikola’s stock fell around 20% Monday shortly after the start of regular trading. That’s a tough hit after the company announced the departure of its CEO and president last week alongside disappointing earnings. Nikola reported a 15% drop in revenue and a nearly 26% increase in losses from the same period last year.

Nikola had previously suspected foul play as the cause of a battery fire on June 23 outside the company’s headquarters in Phoenix. Video footage showed a vehicle parked next to the impacted trucks and pulling away after a bright flash and the start of the fire. After internal investigations and a probe from a third-party investigator, Nikola has ruled out foul play and other external factors.

The preliminary findings from Exponent found a coolant leak inside a single battery pack to be the probable cause of the truck fire at the company’s headquarters. Those findings were further corroborated by a minor thermal incident in another pack on an engineering validation truck parked at Nikola’s Coolidge plant on August 10. The company said no one was injured in either incident. Out of the more than 3,100 packs on trucks produced to date, those were the only two thermal incidents to occur. 

Nikola’s internal investigations found a single supplier component within the battery pack to be the source of the coolant leak. The company says it will provide a field remedy in the coming weeks.

While owners of Nikola’s BEV trucks may keep them in operation, the company suggests customers and dealers place the Main Battery Disconnect (MBD) switch to the “ON” position at all times to allow for real-time vehicle monitoring and safety systems operations. Nikola also encourages customers to consider parking their trucks outside to allow for over-the-air updates and better connectivity to Nikola’s truck monitoring system.

Nikola said the recalls do not affect the hydrogen fuel cell EVs currently in production, which have a different battery pack design.

Nikola has experienced a string of scandals and internal dramas over the past several years, largely due to its controversial and since ousted founder Trevor Milton, who was charged with wire and securities fraud.

Last week, the company successfully received enough shareholder support to issue more shares, a move that would allow it to potentially raise more capital.