Nikola, the electric vehicle startup (NKLA.O), announced on Wednesday that its wholesale and retail sales of electric vehicles in the second quarter showed growth compared to the previous quarter, providing a positive outlook for the company despite facing financial challenges and intense competition.
Nikola Reports Increase In Sales
During the quarter, reported that retail sales of its trucks doubled, reaching a total of 66 units. Additionally, the wholesale figures rose from 31 to 45 vehicles.
The news of increased sales helped mitigate some of the premarket losses suffered by Nikola’s shares. Following the announcement that the company would liquidate assets of Romeo Power, a battery maker acquired less than a year ago, Nikola’s shares were down 1.6%.
In August of the previous year, Nikola purchased Romeo Power for approximately $144 million, aiming to expedite its battery pack manufacturing efforts.
In the second quarter, electric vehicle manufacturers Tesla (TSLA.O) and Rivian (RIVN.O) also surpassed market estimates for deliveries.
During the same period, Nikola, which went public in 2020, manufactured 33 trucks, a decrease from the 63 trucks produced in the previous quarter.
Like other smaller electric vehicle companies, Nikola has faced financial difficulties due to a diminishing cash reserve and supply chain constraints, impeding its production scale-up efforts.
In May, the company reported a larger quarterly loss and announced a temporary production pause to streamline assembly at its factory in Coolidge, Arizona. This decision was made due to sluggish demand for its battery-powered trucks and amidst a dispute with Trevor Milton, the company’s founder and top shareholder.
To reduce costs and focus primarily on the North American market, the Phoenix-based automaker disclosed plans to lay off a total of 270 employees in June.