Electric truck maker Nikola announced the appointment of its fourth CEO in as many years on Friday, as it grapples with various challenges including cash depletion, supply chain constraints, and a shift to hydrogen fuel cell technology.
In early trading, the Phoenix-based company’s shares dropped nearly 13% following the announcement that Chairman Stephen Girsky would assume the role of CEO immediately, replacing Michael Lohscheller.
Previously serving on General Motors’ board, Girsky acted as an adviser to the CEO and finance chief of the parent company of Chevrolet.
Lohscheller is stepping down due to a personal family matter and will be returning to Europe. However, he will continue to serve in an advisory capacity until the end of September.
Meanwhile, Nikola reported a narrower second-quarter loss as the reduced production of its Tre battery-electric trucks in the April-June period helped to control costs.
The company has been grappling with dwindling cash reserves as it invests heavily in scaling up truck production.
During the annual shareholder meeting on Thursday, investors approved a proposal allowing Nikola to issue more shares in order to raise funds.
The meeting was postponed twice because Nikola initially did not receive shareholder approval for the move, an action that founder Trevor Milton publicly opposed in his first social media post in years.
In June, Milton stated in a LinkedIn post, “The company does not need new shares, they need new leadership.”
Milton resigned as CEO in 2020 after short-seller Hindenburg Research published a critical report labeling Nikola a “fraud.”
Last month, Nikola announced its plans to liquidate the assets of battery maker Romeo Power, which it had acquired less than a year ago for $144 million.
Following Girsky’s appointment, Steve Shindler, who has been a board member since 2020, will serve as chairman, according to the company’s statement on Friday.
Reporting by Akash Sriram in Bengaluru; Editing by Anil D’Silva