Nikola is Recalling Trucks After a Battery Issue; Stocks Are Sinking

Nikola Inc. has initiated a voluntary recall encompassing over 200 of its electric vehicles following an investigation into the functionality of their battery packs.

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In a recent announcement made on Friday, the company conveyed its decision to recall approximately 209 Class 8 Tre battery-electric vehicles (BEV) as a proactive measure. Nikola also revealed its plan to temporarily suspend the sale of new BEVs. This decision, however, will not impact the production of hydrogen fuel-cell electric vehicles (FCEV), which are characterized by a distinct design.

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Nikola attributed the recall to findings from a third-party investigation conducted by Exponent. According to the investigation, a coolant leak within a battery pack was identified as the probable cause of a truck fire in June 2023.

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The company stated, "Internal investigations from Nikola’s safety and engineering teams indicate a single supplier component within the battery pack as the likely source of the coolant leak and efforts are underway to provide a field remedy in the coming weeks."

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Following this development, Nikola's stock experienced a decline of approximately 10% during Monday morning trading.

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While the Tre BEV trucks can continue operating, Nikola recommended that customers and dealers activate the Main Battery Disconnect and position the trucks outdoors. This will facilitate over-the-air updates and enhance connectivity with Nikola's monitoring system.

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It's noteworthy that, initially, Nikola had considered the possibility of "foul play" contributing to the June fires. Subsequent comprehensive internal investigations, third-party-led hypothesis testing, interviews with employees and contractors, and extensive video footage review led the company to conclude that foul play or other external factors were improbable causes of the incident.

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Nikola is set to furnish additional details for its customers within the forthcoming weeks.

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