Nikola Plunges After Battery Fires Spur Recall, Sales Halt

(Bloomberg) — Nikola Corp. shares plummeted after the manufacturer announced it will recall trucks and temporarily stop sales after several battery fires.

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The company will call back roughly 209 of its Tre trucks after a third-party investigator found a coolant leak was likely behind a blaze at the company’s Phoenix headquarters in June. While Nikola said its vehicles can remain in operation, it advised customers and dealers to park outside until a fix is ready in the coming weeks.

Nikola’s stock plunged as much as 20% shortly after the start of regular trading Monday. The shares have fallen 98% from their peak reached in June 2020, the month Nikola went public by merging with a special purpose acquisition company.

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Internal investigations by Nikola’s safety and engineering teams indicate a single supplier component within its battery packs are the likely source of coolant leaks that a third party found to be the probable cause of the June truck fire.

The company said this was corroborated by another “minor thermal incident” last week involving one of its engineering-validation trucks in Arizona. No one was injured in either case.

Nikola said only two of its batteries have experienced a thermal event out of more than 3,100 packs on trucks produced to date.

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(Updates with share move after the start of regular trading in the third paragraph.)