Nikola: Improved Results, But Not Enough To Make It A Good Investment

Core Viewpoint - Nikola Corporation's Q2 results showed a significant increase in revenue but also a substantial increase in gross losses, indicating ongoing financial struggles despite record deliveries of hydrogen-powered vehicles [2][3]. Financial Performance - Revenue for Q2 2024 more than doubled from $15 million to $31 million, while gross loss increased from $28 million to $55 million [2]. - Gross margin percentage improved slightly from -180% in Q2 2023 to -175% in Q2 2024, but the company is still far from achieving sustainable unit economics [2]. - The average sticker price for Nikola's trucks is $351,000, which is less than half of the production cost, leading to continued financial losses [2]. Operating Losses - Nikola reported a $131 million operating loss for Q2 2024, an improvement from the $169 million loss in Q2 2023, but still indicative of significant financial challenges [2]. - The company has made some progress in reducing R&D and SG&A costs, but overall financial health remains precarious [2]. Cash Position and Dilution - As of June 30, Nikola had only $256 million in cash, which may last for two more quarters based on its current burn rate [3]. - The company has indicated it does not have sufficient funds to continue operations for the next 12 months without raising additional capital [3]. - Nikola has already diluted its shares by over 300% since its listing and will likely need to raise funds again, risking further dilution for current shareholders [3]. Future Viability - Nikola's fuel cell trucks are described as a "fun science project" with limited potential for profitable scaling, raising concerns about the long-term viability of the business [3]. - Investors are currently funding the company's R&D efforts, but there is skepticism about whether these investments will yield returns in the future [3].