Nikola shares his fall after the recall of electric semi-trailers

Key Points

Nikola Corp. recalls 209 Class 8 Tre tractor-trailer trucks due to potential battery malfunctions that could lead to fires.
Nikola's stock fell nearly 10% in early trading Monday after the recall was announced.
The electric vehicle maker said a coolant leak was the likely cause of two battery incidents.
The recall decision does not affect Nikola's hydrogen fuel cell trucks in production.

Shares of Nikola Corp. (NKLA) sank further more than 9% in early trading Monday after the electric vehicle (EV) maker voluntarily recalled 209 of its Class 8 Tre tractor-trailers due to potential battery fires. The company said it was also suspending sales of any new battery electric vehicles (BEVs) until a resolution is in place.

Nikola said internal and third-party investigations revealed that a coolant leak inside a battery was the probable cause of a fire on June 23 in a truck at the company headquarters in Phoenix. The problem was substantiated on August 10, when a technical validation truck from the Coolidge, Arizona plant had “a minor thermal incident” affecting a battery. No injuries were reported in either incident.

The electric vehicle maker said a single supplier component in the battery was the likely source of the leak. He added that “efforts are underway to deliver a cure on the ground in the coming weeks.” In the meantime, BEV truck owners and dealers are urged to take action to help the company monitor the vehicles.

Nikola noted that his hydrogen Cell electric vehicles currently in production are not affected because their batteries have a different design.