Carey Mendes, who led the branding of Nikola Corp.’s hydrogen business and signed a deal to get financing for up to 50 hydrogen fueling stations, has resigned from the electric truck and hydrogen distribution developer.
The company announced the departure in a one-sentence filing with the Securities and Exchange Commission on Friday. Nikola did not publicly name a successor.
Mendes became president of energy less than a year ago. He joined the electric truck and hydrogen distributor as the global head of energy finance in October 2021. He did not respond to a request for comment on his decision.
During Mendes’ brief tenure, Nikola made several moves in the hydrogen space. The largest was a partnership with infrastructure startup Voltera Inc. to finance hydrogen up top 50 fueling stations where hydrogen-powered fuel cell trucks from Nikola and other fuel cell trucks could fill up.
At $10 million to $20 million per station, the investment could amount to as much as $1 billion.
So far, eight station locations in California are known. Each is financially supported by the state of California as it pursues Gov. Gavin Newsom’s goal of a clean and renewable hydrogen economy.
Mendes also oversaw a yearlong effort to brand Nikola’s fueling distribution as Hyla, announced in January.
Partnerships drive Nikola’s hydrogen station buildout
Mendes told FreightWaves in an interview in May that the cost of developing hydrogen is not something Nikola could bear alone because developing trucks is so capital intensive.
“The infrastructure side is very partner based,” said Mendes, who spent nearly 13 years at BP, where several of his six roles involved energy trading. BP and Nikola once expected to partner on fueling stations. Nothing has developed.
“BP is a great innovative company. They’re doing a lot of stuff that’s very cutting edge in the space of electrification, hydrogen, renewables,” Mendes said. “Companies like BP are really looking to aggressively get into this market.”
Nikola issues $125 million in senior debt
In July, Nikola sold its Phoenix Hydrogen Hub under development in Buckeye, Arizona, to Fortescue Future Industries for $24 million. Nikola will be a customer for green hydrogen produced there. Fortescue and Nikola agreed in January to evaluate the co-development of large-scale U.S. green hydrogen production facilities.
But Nikola’s financial pressures led it to cash out of the project, similar to ending a manufacturing joint venture in May with Iveco to build electric and hydrogen trucks in Europe. Iveco has rebranded the trucks and is moving ahead on its own, Nikola’s Tre models are based on the Iveco S-Way.
Nikola can sell new stock to raise capital following a shareholders agreement earlier this month to double authorized shares to 1.6 billion from 800 million. But the dilution of existing investors has contributed to a pullback in Nikola’s stock price (NASDAQ: NKLA). Shares closedd nearly 23% lower at $1.51 Monday after the company announced it was issuing $125 million in senior debt convertible to stock. It could borrow another $200 million over the next 18 months. The interest rate is 5% annually, payable in cash or stock. If Nikola defaults on the notes, the interest rate jumps to 12.5%.
As part of the new senior debt agreement with Wilmington Savings Fund Society, Nikola agreed to terminate an equity line of credit with Tumim Stone Capital established in 2021.
Senior debt does not immediately dilute current shareholders the way direct sales of news shares does. Upon getting the higher number of authorized shares, Nikola on Aug. 4 increased its at-the-market arrangement with Citigroup Capital Markets to sell up to $600 million in stock from $400 million. Citi gets a 2.5% discount below the price of the shares.
“We need to raise more capital here. We’ve been up front about that,” CEO Steve Girsky told FreightWaves last week. “There’s dilutive and there’s non-dilutive ways. Non-dilutive ways are asset sales and stuff like that. There’s some of that laying around here.”
Fix for battery fires could come in October
Separately, Nikola’s recall of 209 Class 8 trucks because of a suspected coolant leak in the battery that resulted in two fires may take some time to identify a fix.
In its filing with the National Highway Traffic Safety Administration, Nikola said it would tell customers about the issue this month and follow up when it has a solution, expected in mid-October.
Meanwhile, Nikola temporarily halted deliveries of the Tre BEV (battery electric vehicle) until a fix is developed and corrected parts are available. This will negatively impact Q3 revenue, which Nikola hoped to improve by selling down its backlog. The company estimated less than 1% of recalled trucks would experience the condition.
Nikola’s fuel cell electric vehicles (FCEVs) went into production this month. They use a different battery and are not involved in the recall. Customer deliveries are expected to begin in Q4.
Editor’s note: Updates with closing stock price.
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