BTIG downgraded Nikola stock due to battery problems
2023.01.17 08:07
BTIG downgraded Nikola stock due to battery problems
By Kristina Sobol
Budrigannews.com – Nikola Corp (NASDAQ:) received a price target reduction and BTIG maintained a Buy rating. to $5.00 (up from $7), as manufacturing batteries faces ongoing difficulties. At the Consumer Electronics Show (CES) this month, one of the most pressing issues facing OEMs was the cost of battery metals and current battery prices.
Through an acquisition, NKLA brought battery production in-house last year; however, BTIG anticipates that higher costs and the reorganization of that business will have a negative impact on vehicle production and margins in the near future.
The legacy battery plant in California will be relocated to Coolidge by 3Q23, NKLA announced on Friday. This reorganization follows Lightning eMotors’ (NYSE:) announcement last week. that the company was lowering their sales goals because their battery supplier, NKLA, had failed to deliver.
“We expect NKLA to slow play production over the next few quarters as it continues to work to improve battery manufacturing margins,” BTIG analysts wrote in a note. “While demand for NKLA’s BEV Tre remains strong (received another purchase order from a transportation operator earlier this month), we expect NKLA to slow play production over the next few quarters.”
Concerns led BTIG to reduce its 2023 delivery estimates to 450 BEVs (a revenue of $158 million), down from 960 BEVs (a revenue of $380 million), with the majority of BEV sales occurring later this year as battery unit economics improve. BTIG also decreased its 2023 revenue estimates to $158 million, which is 46% lower than the consensus. These estimates are based on 450 deliveries, with the majority of 2023 revenue coming from 4Q23.
In pre-market trading on Tuesday, NKLA shares are up about 1%.
