© Reuters BTIG cuts Nikola (NKLA) to $5 as battery concerns continue
by Michael Elkins
BTIG reiterated a Buy rating and lowered its price target on Nikola Corp (NASDAQ:) to $5.00 (from $7) as ongoing battery manufacturing challenges remain a concern. One of the biggest issues facing OEMs at the Consumer Electronics Show (CES) this month related to current battery prices and battery metal costs.
NKLA brought battery production in-house last year through an acquisition, however BTIG expects higher costs and restructuring of that business to hit vehicle production and margins in the near term.
On Friday, NKLA announced the closure of the former battery facility in California, which will move to Coolidge by 3Q23. This restructuring comes on the heels of last week’s announcement by Lightning eMotors (NYSE:) that the company was lowering its sales targets due to non-delivery with its battery supplier, NKLA.
BTIG analysts wrote in a note, “While demand for NKLA’s BEV Tre remains strong (we received another purchase order from a transport operator earlier this month), we expect NKLA to scale back production in the coming quarters. as he continues to work on improving the battery. manufacturing margins.
As a result of concerns, BTIG lowered 2023 delivery estimates to ~450 BEV (~$158 million in revenue) from ~960 BEV (~$380 million in revenue) with the bulk of BEV sales being they will be produced later this year after battery unit economics improve. . BTIG also cut 2023 revenue estimates to ~$158 million (~46% below consensus), which is based on ~450 deliveries with 2023 revenue heavily weighted to 4Q23.
NKLA shares were up about 1% in premarket trading on Tuesday.
