Nikola’s roller coaster week; Tesla hit with another lawsuit: This week in EVs

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Electric truck maker Nikola (NASDAQ:NKLA) underwent a hectic week of big share-price movements, beginning with an 18% surge Monday after the company said it had entered a purchase agreement with JB Hunt Transport Services (NASDAQ:JBHT).

According to the agreement, struck via Nikola’s EV brand, HYLA, JB Hunt will acquire 13 Nikola zero-emission Class 8 trucks – 10 battery-electric and three hydrogen fuel cell electric trucks – with the first deliveries scheduled for this month.

Shares continued surging after, just two days later, Nikola proudly revealed it had surpassed 200 sales orders for its Class 8 Nikola hydrogen fuel cell electric vehicles, attracting orders from 18 different end customers.

“This remarkable demand for our hydrogen fuel cell electric truck confirms the industry’s trend toward sustainable transportation solutions,” said Nikola CEO Michael Lohscheller.

But then, on Friday, the stock erased most of its weekly gains after Nikola said Lohscheller was stepping down immediately due to a family health matter.

Chairman Steve Girsky was appointed to the position, and despite his impressive 30-year experience in the industry, some investors expressed concerns about the stability of Nikola’s management team, as this represented the fourth CEO transition in as many years.

Lohscheller will stay on as an advisor until the end of September before he returns to Europe. One of his final actions as CEO was overseeing a crucial vote to raise the allowable number of shares the company can issue, enabling Nikola to secure much-needed capital for its operations.

Nikola released 2Q earnings results Friday, reporting 2Q EPS of ($0.20), $0.02 better than consensus estimates. Revenue for the quarter came in at $15.36 million versus the consensus estimate of $15 million.

Shares of NKLA closed up just 2.9% for the week to $2.50 – down nearly 32% off its intraday high of $3.66, which it hit on Thursday.

Tesla’s (NASDAQ:TSLA) eventful week began on Monday with news that the EV maker has opted to introduce price reductions in Hong Kong. As reported by the Hong Kong Economic Times, several versions of their Model 3 and Model Y cars will see price cuts, varying from 6% to 11.9%.

Tesla shares have fallen close to 15% since the company reported its second-quarter results, reaffirming its strategy to place growth over margins and hinting that there may be more price cuts in the future.

In other Tesla news, it was reported that company execs met last week with India’s Commerce Minister, Piyush Goyal, to discuss plans for establishing a manufacturing plant in the country.

Tesla and India have been exploring a potential business relationship for several years, but the right circumstances had not materialized to solidify Tesla’s commitment to setting up a factory in the country.

This meeting with Minister Goyal marks a significant milestone, as it represents the most high-profile interaction between the two entities since CEO Elon Musk’s meeting with Indian Prime Minister Narendra Modi in June. It also comes amid reports of Tesla leasing 5,850 square feet of office space there.

Back in the U.S., Tesla is facing a class action lawsuit that accuses the company of false advertising regarding the estimated driving ranges of its EVs.

The lawsuit, filed in the U.S. District Court for the Northern District of California, references a recent Reuters article alleging that Tesla established a “Diversion Team” in Nevada to handle numerous owner complaints about range-related issues, aiming to cancel as many range-related appointments as possible.

The reports also revealed that Tesla made a decades-old decision to develop algorithms for its in-dash range meter that would show optimistic projections to drivers about the distance their vehicles could travel on a full battery. According to an unnamed source cited in the articles, the decision to manipulate range estimates originated from Musk himself. It remains uncertain whether the company still uses these algorithms.

The lawsuit claims that Tesla violated vehicle warranties and engaged in fraud and unfair competition.

Shares of TSLA closed the week down 4.56% to $253.86/sh.

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