Shulou(Shulou.com)11/24 Report--

In the face of disaster, we fly separately.

Author | Cao Tingting

Editor | on the continent

The cold wave in the operation of start-up electric car companies continues.

Nicholas has just announced that it is liquidating the assets of its battery subsidiary and has initiated the process in accordance with the California creditor transfer of interest (ABC).

The separate battery division, Romeo Power, a battery startup that Nikolai bought last August for $144 million, was planning to supply batteries to his pure-electric trucks.

Now, less than a year after the acquisition, it has begun to make emergency moves.

Officials did not say why, but a bizarre fire not long ago was imaginative enough.

On June 23, Nikolai's pure electric truck caught fire in the parking lot below the company's Phoenix headquarters. The fire first started with one car, then gradually spread to five, and lasted for nearly three hours. The brand-new electric truck was also burned to a skeleton.

Source: Twitter thought this was the usual script for the spontaneous combustion of most electric cars, but Nikolai was convinced that there was nothing wrong with his car because of "deliberate murder". They also gave evidence that a car was sneaking around in the area where the truck was parked before the fire.

However, netizens do not buy this argument, after all, Nikolai has too many criminal records and black material, founder fraud, new car fraud, and so on, each of which is enough to put it out in the cold.

It was not until a report by foreign media Electrek that the truth gradually emerged.

It is reported that the battery module used by Nikolai has major safety defects, which may lead to fire. A week later, the local fire department gave the answer: there was no evidence of arson.

Nikolai is also at risk of delisting in the face of poor performance, depressed share prices and tight cash flow, not just the resale battery subsidiary.

01. on June 23, the official account of Nikolai Motor Company posted a tweet on Twitter:

"early this morning, a fire broke out at our Phoenix headquarters, affecting several trucks and no one was injured. before the incident, a car was found in the damaged truck area. we suspect it is a" murder "and an investigation is under way."

Source: Twitter was quickly hit in the face, and local officials said there was a good chance that the Nikolai fire had some kind of chemical reaction in the battery of a truck, which caused the fire and spread to other vehicles.

This statement also confirmed reports by foreign media Electrek that Nikolai's truck caught fire and that there was something wrong with the battery.

In August 2022, Nikolai bought Romeo Powe, a battery technology company, for $144 million. After the acquisition, the latter began to design and produce battery modules for Nikolai.

But last year, engineers working on battery modules found that there was something wrong with the battery-it was easy to corrode and discharge automatically.

According to an internal investigation report, Nikolai's team has recognized the problem and examined the battery module and found that the battery corrodes very quickly, probably no more than two cycles.

Battery corrosion will generate heat, increase the resistance of the battery joint, and also lead to the imbalance of voltage increment, which is the potential factor of spontaneous combustion for electric trucks.

Source: a former Romeo employee on Twitter who knew about the problem said the engineering director had suggested shutting down production of the module, but the then CEO, Susan Brennan (Susan Brennan), chose to continue production while trying to solve the problem.

In fact, Nikolai executives also found this problem, but in the car-building process, time is real money, an insider said that the company is eager to produce, "it is possible to put some damaged batteries into Nikolai trucks."

Electrek contacted Nikolai immediately, and the company admitted that it was aware of the problem, but insisted that there was no problem with making battery modules for trucks.

Now Nikolai is eager to distance himself from Romeo, which makes people suspect that he has a guilty conscience.

Romeo Powe, founded in 2016, is a North American power battery start-up, with several founders of Romeo.

Source: Patterson, founder of Romeo Power, is a successful native American entrepreneur. He has had three successful cases before, and all the companies he founded have been acquired by American giants.

In addition, CEO Selwood was a future executive at SpaceX and Faraday; CTO Srouji was a member of the core team at Bosch's battery research and development center in Silicon Valley; and COO ChrisWell graduated from MIT and worked at Apple and Sandisk for more than 17 years.

After its founding, the company, like Tesla, used cylindrical lithium-ion cells, which were purchased mainly from LG, Samsung, Panasonic, Sony and other suppliers and grouped through aluminum wire bonding technology to make battery modules and packs for large electric commercial vehicles.

In October 2020, Romeo went public through a merger with SPAC, valuing the combined company at approximately $900 million.

In November of the same year, Romeo received an order for Lion Electric from Commercial vehicles of Canada to provide battery modules and packs for its electric trucks and buses.

Normally, this order will generate $234 million in sales for Roemo in the five years from 2021.

Source: Romeo Power, but the interior of Roemo is not as bright as it seems. With the epidemic and rising prices of raw materials since 2021, Roemo has spent nearly $270 million a year. In the first quarter of 2022, Roemo had only $44.33 million in cash on its books and was mired in a loss crisis.

In August 2022, Nikolai, a major customer, bought Romeo for $144 million, and as part of the deal, Nikolai will provide Romeo with $35 million in temporary funding to continue its operations until the deal is completed.

Nikolai said he believes the acquisition will save him as much as $350 million over the next four years.

But in fact, both sides knew that this combination was more like a "weak alliance", not to mention that the main business of Romeo had little to do with Nikolai's hydrogen battery business at that time.

Now that there is something wrong with the battery, Nikolai is even more eager to get rid of this hot potato.

02. 66 cars were handed in in three months. in fact, even without the fire, Nicola would have been a chicken feather.

On July 6, Nikolai's shareholders' meeting, which was supposed to be held, was not held as desired. Nikolai announced that his shareholders' meeting had been postponed to August 3 again, because Nikolai's proposal to increase his stake did not get enough shareholder votes.

Source: Nikolai's proposal is to allow Nikolai to issue more shares to raise more money. Nikolai needs to ensure that more than 50% of the outstanding shares support the proposal.

Nikolai's first commercial production is only a few weeks away, and the company says production could be delayed or cancelled if the proposal is not approved.

But for shareholders, issuing more shares may reduce the value of shares held by existing investors.

In early June, Nikolai received a warning letter of delisting because the share price had not met the minimum requirement of $1 in the past 30 days.

But according to the current voting results, Nikolai has not been given a chance to re-comply, and according to the first-quarter results, Nikolai's trouble is far less than that.

In the first quarter, Nikolai reported total revenue of $11.12 million, less than analysts' expectations of $12.5 million. The net loss also continued to expand, to $170 million, and cash consumption increased from $200m to $240 million.

Source: Nikolai's truck production plan has also been suspended. According to Nikolai, the shutdown is for better development, and the company will transform the production line of its plant in Arizona to achieve the ability to produce both hydrogen fuel cell trucks and pure electric trucks on the same production line.

The next production is expected in July, and according to officials, the first batch of hydrogen fuel cell trucks will be built for sale. And the delivery of pure electric trucks that have begun mass production is not good.

In the second quarter of this year, Nikolai said that the wholesale and retail volume of his electric vehicles increased sharply in the second quarter compared with the first quarter, of which retail sales doubled to only 66, and the wholesale number increased from 31 to 45. In May, Nikolai sold only 14 pure electric trucks.

03. The names of Nicholas and Tesla are both inspired by the scientist and inventor Nikolai Tesla, who uses his first name and the latter's surname, so Nikolai has been using the label "Tesla" to promote himself.

In 2014, Trevor Milton founded Nikolai in Salt Lake City, Utah, to develop and produce hydrogen fuel cell heavy trucks. Two years later, Nikolai unveiled the Nikola One, the first hydrogen fuel cell truck, and the Nikola Zero, an electric four-wheel drive off-road vehicle.

Source: in 2018, Nikolai launched both the pure electric version of Nikola Two and the pure electric version of hydrogen fuel version Nikola Tre, followed by luxury off-road vehicles NZT and nikola badger electric pickup trucks, during which time it was completed and became the "first stock of hydrogen energy heavy trucks in the world".

Before listing, the financing process was very smooth, with four rounds of financing in four years. Nikolai completed round A financing of US $16 million in 2016, valuing the company at US $300 million. Three years later, Nikolai completed D-round 's financing of $250 million, valuing the company at $3 billion. Nikolai claims to have orders for 14000 cars, with potential sales of $10 billion.

After the listing, Nikolai became the front-runner in the new energy track, and in less than a week, the share price doubled from $35 to more than $80, with a market capitalization of $34 billion.

Nikolai, who seems to have got the script of the protagonist, is not optimistic about his actual development. In September 2020, when Nikolai's myth was broken, when Nikolai was only three months old on the market, Hindenburg issued a short report, mainly aimed at Nikolai and his founder Milton, while exposing a number of Nikolai fraud.

For example, using natural gas heavy trucks as hydrogen energy heavy trucks, falsifying sales orders, developing hydrogen fuel technology is false news, hydrogen production capacity, prices, assets are also falsified, spare parts production capacity and project schedule are also seriously not in line with reality.

Even the promotional video of the battery truck Nikola One at that time was full of water. In the promotional video, the picture of the truck driving at a flat speed is actually placing the model on the hillside to glide on gravity, while deliberately tilting the angle of the camera to make it look like it is moving on a smooth road.

Source: GM abandoned its partnership with Nicholas immediately after the screenshot of the short report broke, and founder Milton faces up to 25 years in prison.

After Milton left, Nikolai's leadership changed dramatically. Michael Lohscheller, the former CEO of Opel, is now the CEO, and Nikolai finally built a real truck.

Founder Milton recently said on social media that he opposed the company's proposal to issue an additional 50 million shares. But Nikolai said Milton had no right to object.

The founder who single-handedly founded the company is now expelled by the company. Some people call Milton the American version of Jia Yueting, but now the first step of Mr. Jia's turnaround has been completed, and the 9-year-old FF91 has finally gone offline. Can Milton still turn over?

This article is from the official account of Wechat: Superelectricity Lab (ID:SuperEV-Lab), author: Cao Tingting

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