Nikola recalls all battery EV trucks and halts sales due to fire risk

Nikola stock (NKLA) fell sharply on Monday after the electric commercial truck maker announced a voluntary recall of all 209 of its battery-electric trucks due to a fire risk.

Nikola says it will also temporarily halt sales of its Class 8 Tre battery electric trucks until a fix is in place. And for those trucks that remain in operation, the company is suggesting parking the vehicles outside. Nikola's Tre battery electric trucks cost an estimated $300,000 but do qualify for commercial EV tax credits.

The recall announced on Monday stems from a fire that damaged multiple battery-electric trucks at Nikola’s Arizona headquarters in June.

At the time Nikola said it suspected "foul play," but the Phoenix Fire Department concluded its investigation and found no evidence of arson — and Nikola’s own outside investigator determined the same. The investigator found that a coolant leak inside a single battery pack was the probable cause of the truck fire. Nikola’s engineering teams determined that a "single supplier component" within the battery pack was the source of the coolant leak.

"At Nikola, we take safety very seriously," said CEO Steve Girsky, who assumed the top executive role at Nikola less than two weeks ago. "We stated from the beginning that as soon as our investigations were concluded we would provide an update, and we will continue our transparency as we learn more."

Nikola revealed only two battery packs have experienced the "thermal event" out of the more than 3,100 packs on trucks produced to date. Nikola says the company is in the process of determining what can be done to resolve the issue in the field over the coming weeks.

Nikola said that the coolant leak issue does not affect the company’s hydrogen fuel-cell EVs currently in production. Those vehicles have a different battery pack design.

Hydrogen fuel-cell trucks have become a bigger focus for the company. It recently announced that Bosch has started making fuel-cell power modules for Nikola's trucks. The company has also struck a hydrogen supply and truck deal with hydrogen producer Bayotech.

In terms of future production, Nikola said earlier this year that it was only going to build its battery-electric trucks on a “build to order” basis, as it ramps up its hydrogen fuel-cell truck assembly lines.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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