Q3 2024 Nikola Corp Earnings Call

In This Article:

Participants

Soei Shin; IR; Nikola Corp

Stephen Girsky; President, Chief Executive Officer, Director; Nikola Corp

Thomas Okray; Executive Vice President, Principal Financial Officer and Principal Accounting Officer; Nikola Corp

Michael Shlisky; Analyst; D.A. Davidson & Co.

Cole Couzens; Analyst; Wolfe Research

Tyler DiMatteo; Analyst; BTIG

Ben Kallo; Analyst; Robert W. Baird & Co. Incorporated

Presentation

Operator

Good morning, and welcome to Nikola Corporation's third-quarter 2024 Earnings and Business Update Call. (Operator Instructions) As a reminder, this conference is being recorded.

Soei Shin

Thank you, operator, and good morning, everyone. My name is Soei Shin, Head of Investor Relations. I'd like to welcome those listening by phone and those on the webcast to Nikola Corporation's Third Quarter 2024 Earnings and Business Update Call. Joining me today are Steve Girsky, President and CEO; and Tom Okray, Chief Financial Officer.
A press release detailing our financial and business results was distributed earlier this morning. This release can be found on the Investor Relations section of our website, along with presentation slides accompanying today's call. Today's discussion includes references to non-GAAP measures.
The presentation includes adjusted EBITDA, non-GAAP earnings per share, adjusted free cash flow and other non-GAAP measures. These measures are reconciled to the most comparable US GAAP measures and can be found at the end of the Q3 earnings press release we issued today.
Today's discussion also includes forward-looking statements about our future results, expectations and plans. Actual results may differ materially from those stated, and some factors that could cause actual results to differ are also explained at the end of today's earnings press release on Page 2 of our earnings call deck and in our filings with the SEC. Forward-looking statements speak only as of the date on which they are made. You are cautioned not to put undue reliance on forward-looking statements.
After Steve and Tom's prepared remarks, we'll take questions from our stockholders and then conclude with questions from analysts.

Stephen Girsky

Thanks, Soei, and good morning, everyone. Welcome to our third quarter 2024 earnings and business update call. Year-to-date through the third quarter, we had record sales of hydrogen fuel cell electric trucks, a 78% growth in fuel cell electric vehicle fleet adoption and a nearly 350% increase in hydrogen fuel dispensed at our commercial stations. We also returned 78 BEV 2.0 trucks back to end fleets and dealers.
With every truck delivered and fueled at our stations, we continue to deliver proof points to the market that zero-emission trucks are driving the future of Class 8 mobility. Program to date, Nikola fuel cell electric trucks and battery electric trucks have accumulated over 4 million validation miles, avoiding over 6,000 metric tons of CO2 tailpipe emissions, which is equivalent to the emissions generated by over 1,500 gasoline-powered passenger cars in 1 year.
The third quarter is an example of how we're executing our strategic and operational objectives by strengthening our resolve to push forward, meet the demands of our end fleets and lay a path for a sustainable future. First, at the end of Q3, we announced we had wholesaled a record 88 hydrogen fuel cell electric trucks, firmly within the guidance range of 80 to 100. We continue to dominate the heavy-duty fuel cell electric vehicle market in North America with over 90% share based on the most recent Polk registration data. We also expanded our dealer network for the first time since the launch of the fuel cell electric vehicle in Q3 2023, allowing more access to both Nikola fuel cells and BEVs in Southern California.
Second, we are building momentum in the zero-emission ecosystem. Currently, we're the only OEM to offer 2 zero-emission powertrains on 1 commercial Class 8 platform in North America. This speaks to our unique ability to meet the diverse business needs of our end fleets. Regarding fuel cell electric vehicles, we're the only OEM expanding the market or increasing the pie. As the market leader and pioneer, we're also driving end fleet adoption. Year-to-date, in-service fleets have grown 78% to 16 distinct end fleets from 9 in Q1. Across both powertrains, 32 discrete end fleets have deployed Nikola fuel cell or battery electric trucks. Quarter-to-quarter, we're proving as a market for heavy-duty zero-emission vehicles in North America.
Third, we are reiterating our year-end fuel cell electric vehicle guidance volume of 300 to 350 trucks. Fourth, as we mentioned, the BEV 2.0 is back on the road. Program to date, we've made solid progress on the recall and have returned 78 BEVs back to end fleets and dealers to overwhelmingly positive feedback.
Moving on to the business update. We had record sales of 88 fuel cell electric vehicles to our dealer network, up from 22% last quarter. On the retail front, we continue to see strong organic growth from existing end fleets. National fleet partners such as J.B. Hunt, Kenan Advantage Group and DHL recently announced deployment of Nikola fuel cell electric vehicles and noted the important role we play in not only helping them meet their sustainability goals, but those of their end customers, Nestle and Diageo.
Nikola will support Diageo operations with the deployment of its first behind-the-fence hydrogen fueler at its campus in Plainfield, Illinois. End fleets are delivering household goods to their final destinations wherever that may be, all with 0 tail type emissions. Sustainability drives good business, and Nikola stands tall with them.
We're also excited to welcome GTS Group into the Nikola dealer network in Southern California. GTS introduced Next Generation Truck or NGT, as a new division created for the sales and service of Nikola trucks. What's exciting is that Nikola is a catalyst for dealers like GTS who find value in diversifying their business into zero-emissions Class 8 trucks. The additional dealer brings the number of Nikola sales and service locations up to 19 across the US
We're pleased by the traction we're gaining from demos, especially in Canada. Loblaw Supermarkets completed its trial of the BEV 2.0 with high praise for its performance and range. Tim Hortons restaurants will begin demos of both the fuel cell and BEV shortly as they evaluate the best fit for its short- and long-distance routes. Our dealer partner, ITD, is ready and waiting to support [MAX] charging as it has recently built a 400-kilowatt charging station in Toronto. As a reminder, we launched Canada's first modular refueling station at a dealer with ITD last quarter. Together, we are building out the zero-emission ecosystem for the benefit of all.
We're building momentum in the zero-emission ecosystem, exploring uncharted territory, testing new technologies and leading the way for others to follow. Every day, our in-service trucks transmit extensive field data that is analyzed and used to make our trucks a better experience for our end fleets. Likewise, every kilogram dispensed within the HYLA network helps inform our fueling partners and suppliers with the continuous development needed to sufficiently meet the offtake demands on this larger scale. The more trucks we deploy, the more they fuel and the faster the ecosystem reaches stabilization in the learning curve. Nikola stands alone in these pioneering efforts.
To date, 16 fuel cell electric vehicle in-service end fleets have accumulated over 1 million road miles, up from 9 fleets and 120,000 miles in Q1, validating the average fuel economy benchmark of 7.2 miles per kilogram. The data point that's really telling of the fuel cell electric vehicles capabilities is that since last quarter, the total number of runs exceeding 400 miles before fueling has increased to 285 from 192 runs, up 48%. We are seeing that as fuel availability increases and fleet operators get more comfortable with the technology, they are pushing the fuel cell electric vehicle to perform the way it is built to.
For the battery electric vehicles, 19 end fleets have accumulated over 715,000 road miles since putting the BEV 2.0 back into service. The average distance between charging has increased 10% to 143 miles from 130 miles last quarter. Like the fuel cell electric vehicle, end fleets are pushing the BEV to perform to expectations. Since its return to the market, the total number of runs exceeding 200 miles before charging has grown to nearly 950 or 27% of all runs.
On a converted to diesel basis, our FCEVs continue to outperform the average Class 8 truck on fuel economy and avoidance of tail pipe emissions. The average miles per gallon diesel equivalent of our fuel cell electric vehicle remains constant at 8.0 or 23% better than the Class 8 fuel economy average of 6.5 miles per diesel gallon equivalent per the DOE. In total, across both powertrains, we estimate our end fleet operations have avoided 2,700 metric tons of CO2 tail pipe emissions.
Moving to Chart 7. We expect to deliver 10 HYLA fueling solutions by year-end. We are focusing our strategy on providing more support at existing stations to better serve our customers as we scale. Meanwhile, we continue to make progress on stations slated for Q4 as the HYLA team engages daily with local jurisdictions for site approvals and permitting. In fact, we're in the final stages of approvals for several Northern and Central California cities, which further strengthens the North-South I-5 freight corridor. Operationally, over the lifetime of the entire HYLA network, we have recorded over 5,900 fueling events, dispensing over 210 metric tons of hydrogen for an average of 36 kilograms per fill. The year-to-date ramp-up in mobile hydrogen refueling stations has been very strong. Since we began measuring commercial fueling operations in Q1, total hydrogen dispensing has grown nearly 350%.
Moving on to Chart 9. We are excited that the BEV 2.0 is back on the road, hauling freight and validating its use case. Program to date, we've returned 78 BEVs back to the market to overwhelmingly positive feedback. Of the many lessons we've learned, one is of its resiliency. These last 12 months have been a story about the BEV's ability to withstand challenges, recover from failures and emerge as an adaptive and evolving truck without compromising performance.
For example, one end fleet carrier optimizes its linehaul operations for a major consumer company by carrying high-value, low payloads from Northeast ports to the Midwest with our BEV 2.0. When the load has cubed out before it has weighed out, the BEV 2.0 is a perfect fit. Field data tells us that this win completes the over 800-mile run over 2 days with 5 charges at an average distance of nearly 160 miles between charges. Overall efficiency for this run is 2.5 kilowatt hours per mile, a more than decent measure considering the average speed of 60 to 70 miles per hour with limited regenerative braking on this relatively flat route.
Most importantly, the BEV 2.0 is the truck of choice for this end fleet carrier to meet its client sustainability guidelines to source low carbon or carbon-free logistics services. Another carrier deploys the BEV 2.0 to haul for a major steel manufacturer in the Southeastern US This end fleet maximizes load capacity with route optimization, all the while meeting its clients' preference for zero-emission routes. In fact, one quick midday charge enables the end fleet to double its productivity by running a 160-mile run twice a day. According to the end fleet, no other BEV has the range nor the capability to manage the payload against the strong wins along this route on one charge, let alone twice. These anecdotes are examples of how the BEV 2.0 is adapted in the marketplace to meet and exceed end fleet expectations. It is the truck of choice not only for its performance, but also to meet the sustainability goals of end fleet partners. The BEV 2.0 is back.
Passing it over to Tom to cover the financial results.