Filed pursuant to Rule 424(b)(3)

Registration No. 333-239940

PROSPECTUS SUPPLEMENT NO. 20

(to Prospectus dated July 27, 2020)

Nikola Corporation

Up to 249,843,711 Shares of Common Stock

This prospectus supplement supplements the prospectus dated July 27, 2020 (the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-239940). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our quarterly report on Form 10-Q, filed with the Securities and Exchange Commission on November 4, 2021 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.

The Prospectus and this prospectus supplement relate to the offer and sale from time to time by the selling securityholders named in the Prospectus or their donees, pledgees, transferees or other successors in interest (the “Selling Securityholders”) of up to 249,843,711 shares of our common stock, $0.0001 par value per share (“Common Stock”), which includes (i) up to 6,640,000 shares held by certain persons and entities (the “Original Holders”) holding shares of Common Stock initially purchased by VectoIQ Holdings, LLC (the “Sponsor”) and Cowen Investments II, LLC (“Cowen Investments” and, together with the Sponsor, the “Founders”) in a private placement in connection with the initial public offering of VectoIQ Acquisition Corp. and (ii) 243,203,711 shares held by certain affiliates of the Company. We are registering the shares for resale pursuant to such stockholders’ registration rights under a Registration Rights and Lock-Up Agreement between us and such stockholders, which in addition to such registration rights, also provides for certain transfer and lock-up restrictions on such shares.

Our Common Stock is listed on the Nasdaq Global Select Market under the symbol “NKLA”. On November 3, 2021, the closing price of our Common Stock was $12.71.

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

See the section entitled “Risk Factors” beginning on page 7 of the Prospectus to read about factors you should consider before buying our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is November 4, 2021.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38495

Nikola Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware	82-4151153
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4141 E Broadway Road
Phoenix, AZ	85040
(Address of principal executive offices)	(Zip Code)
(480) 666-1038
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value per share	NKLA	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 1, 2021, there were 404,377,685 shares of the registrant’s common stock outstanding.

NIKOLA CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

		Page
Summary Risk Factors		1
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Comprehensive Loss	5
	Consolidated Statements of Stockholders’ Equity	6
	Consolidated Statements of Cash Flows	9
	Notes to Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Control and Procedures	46
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 6.	Exhibits	73
Signatures		74

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that could affect our ability to successfully implement our business strategy and affect our financial results. You should carefully consider all of the information in this report and, in particular, the following principal risks and all of the other specific factors described in Item 1A. of this report, “Risk Factors,” before deciding whether to invest in our company.

•We are an early stage company with a history of losses, and expect to incur significant expenses and continuing losses for the foreseeable future.

•We may be unable to adequately control the costs associated with our operations.

•Our business model has yet to be tested and any failure to commercialize our strategic plans would have an adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources.

•Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

•We will need to raise additional funds and these funds may not be available to us when we need them. If we cannot raise additional funds when we need them, our operations and prospects could be negatively affected.

•If we fail to manage our future growth effectively, we may not be able to market and sell our vehicles successfully.

1

•Our bundled lease model may present unique problems that may have an adverse effect on our operating results and business and harm our reputation.

•We may face legal challenges in one or more states attempting to sell directly to customers which could materially adversely affect our costs.

•We face risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries.

•Our success will depend on our ability to economically manufacture our trucks at scale and build our hydrogen fueling stations to meet our customers’ business needs, and our ability to develop and manufacture trucks of sufficient quality and appeal to customers on schedule and at scale is unproven.

•We may experience significant delays in the design, manufacture, launch and financing of our trucks, including in the build out of our manufacturing plant, which could harm our business and prospects.

•Increases in costs, disruption of supply or shortage of raw materials, including but not limited to lithium-ion battery cells, chipsets, and displays, could harm our business.

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

NIKOLA CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	September 30,		December 31,
	2021		2020
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	586,986	$	840,913
Restricted cash and cash equivalents	—		4,365
Inventory	3,644		—
Prepaid in-kind services	6,041		46,271
Prepaid expenses and other current assets	13,329		5,368
Total current assets	610,000		896,917
Restricted cash and cash equivalents	—		4,000
Long-term deposits	25,078		17,687
Property, plant and equipment, net	200,655		71,401
Intangible assets, net	97,181		50,050
Investment in affiliates	62,370		8,420
Goodwill	5,238		5,238
Total assets	$	1,000,522	$	1,053,713
Liabilities and stockholders' equity
Current liabilities
Accounts payable	57,251		29,364
Accrued expenses and other current liabilities	170,884		17,739
Finance lease liabilities, current	24,963		1,070
Term note, current	—		4,100
Total current liabilities	253,098		52,273
Finance lease liabilities	428		13,956
Warrant liability	4,428		7,335
Other long-term liabilities	34,732		—
Deferred tax liabilities, net	10		8
Total liabilities	292,696		73,572
Commitments and contingencies (Note 12)
Stockholders' equity
Preferred stock, $0.0001 par value, 150,000,000 shares authorized, no shares issued and outstanding as of September 30, 2021 and December 31, 2020	—		—
Common stock, $0.0001 par value, 600,000,000 shares authorized, 404,306,242 and 391,041,347 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	40		39
Additional paid-in capital	1,799,101		1,540,037
Accumulated other comprehensive income (loss)	(119)		239
Accumulated deficit	(1,091,196)		(560,174)
Total stockholders' equity	707,826		980,141
Total liabilities and stockholders' equity	$	1,000,522	$	1,053,713

See accompanying notes to the consolidated financial statements.

3

NIKOLA CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Solar revenues	$	—	$	—	$	—	$	94
Cost of solar revenues	—		—		—		73
Gross profit	—		—		—		21
Operating expenses:
Research and development	78,896		51,496		201,785		118,098
Selling, general, and administrative	192,929		65,782		329,028		117,821
Total operating expenses	271,825		117,278		530,813		235,919
Loss from operations	(271,825)		(117,278)		(530,813)		(235,898)
Other income (expense):
Interest income (expense), net	(118)		171		(219)		255
Loss on forward contract liability	—		—		—		(1,324)
Revaluation of warrant liability	4,467		37,745		2,907		8,588
Other income (expense), net	1,057		(340)		174		(249)
Loss before income taxes and equity in net loss of affiliates	(266,419)		(79,702)		(527,951)		(228,628)
Income tax expense	1		2		4		4
Loss before equity in net loss of affiliates	(266,420)		(79,704)		(527,955)		(228,632)
Equity in net loss of affiliates	(1,147)		—		(3,067)		—
Net loss	(267,567)		(79,704)		(531,022)		(228,632)
Premium paid on repurchase of redeemable convertible preferred stock	—		—		—		(13,407)
Net loss attributable to common stockholders	$	(267,567)	$	(79,704)	$	(531,022)	$	(242,039)
Net loss per share attributable to common stockholders:
Basic	$	(0.67)	$	(0.21)	$	(1.34)	$	(0.76)
Diluted	$	(0.68)	$	(0.31)	$	(1.35)	$	(0.79)
Weighted-average shares outstanding:
Basic	400,219,585		377,660,477		395,691,795		318,315,891
Diluted	400,230,669		378,286,678		395,860,876		318,976,447

See accompanying notes to the consolidated financial statements.

4

NIKOLA CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net loss	$	(267,567)	$	(79,704)	$	(531,022)	$	(228,632)
Other comprehensive loss:
Foreign currency translation adjustment, net of tax	(123)		—		(358)		—
Comprehensive loss	$	(267,690)	$	(79,704)	$	(531,380)	$	(228,632)

See accompanying notes to the consolidated financial statements.

5

NIKOLA CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Three Months Ended September 30, 2021
		Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
		Shares	Amount
Balance as of June 30, 2021		397,077,561	$	40	$	1,668,362	$	(823,629)	$	4	$	844,777
Exercise of stock options		252,442	—		355		—		—		355
Issuance of shares for RSU awards		453,459	—		—		—		—		—
Common stock issued for commitment shares		252,040	—		2,939		—		—		2,939
Reclassification from mezzanine equity to equity after elimination of put right		—	—		5,532		—		—		5,532
Common stock issued under Stock Purchase Agreement		6,270,740	—		72,866		—		—		72,866
Stock-based compensation		—	—		49,047		—		—		49,047
Net loss		—	—		—		(267,567)		—		(267,567)
Other comprehensive loss		—	—		—		—		(123)		(123)
Balance as of September 30, 2021		404,306,242	$	40	$	1,799,101	$	(1,091,196)	$	(119)	$	707,826

See accompanying notes to the consolidated financial statements.

6

	Nine Months Ended September 30, 2021
		Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
		Shares	Amount
Balance as of December 31, 2020		391,041,347	$	39	$	1,540,037	$	(560,174)	$	239	$	980,141
Exercise of stock options		3,182,359	1		3,980		—		—		3,981
Issuance of shares for RSU awards		1,721,686	—		—		—		—		—
Common stock issued for commitment shares		407,743	—		5,564		—		—		5,564
Common stock issued for investment in affiliates, net of common stock with embedded put right		1,682,367	—		19,139		—		—		19,139
Reclassification from mezzanine equity to equity after elimination of put right		—	—		5,532		—		—		5,532
Common stock issued under Stock Purchase Agreement		6,270,740	—		72,866		—		—		72,866
Stock-based compensation		—	—		151,983		—		—		151,983
Net loss		—	—		—		(531,022)		—		(531,022)
Other comprehensive loss		—	—		—		—		(358)		(358)
Balance as of September 30, 2021		404,306,242	$	40	$	1,799,101	$	(1,091,196)	$	(119)	$	707,826

	Three Months Ended September 30, 2020
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' (Deficit) Equity
	Shares	Amount
Balance as of June 30, 2020	360,910,639	$	36	$	1,168,147	$	(338,236)	$	829,947
Exercise of stock options	294,665	—		320		—		320
Common stock issued related to warrants exercised	22,877,806	3		263,061		—		263,064
Stock-based compensation	—	—		52,196		—		52,196
Net loss	—	—		—		(79,704)		(79,704)
Balance as of September 30, 2020	384,083,110	39		1,483,724		(417,940)		1,065,823

See accompanying notes to the consolidated financial statements.

7

	Nine Months Ended September 30, 2020
	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' (Deficit) Equity
	Shares	Amount		Shares	Amount
Balance as of December 31, 2019	82,297,742	$	383,987	60,167,334	$	1	$	—	$	(188,480)	$	(188,479)
Retroactive application of recapitalization	(82,297,742)	(383,987)		210,658,758	26		383,961		—		383,987
Adjusted balance, beginning of period	—	—		270,826,092	27		383,961		(188,480)		195,508
Issuance of Series D redeemable convertible preferred stock, net of $8,403 issuance costs (1)	—	—		6,581,340	1		56,249		—		56,250
Issuance of Series D redeemable convertible preferred stock for in-kind contribution (1)	—	—		9,443,353	1		91,998		—		91,999
Business Combination and PIPE financing		—		72,272,942	7		594,515		—		594,522
Exercise of stock options	—	—		2,081,577	—		2,204		—		2,204
Stock-based compensation	—	—		—	—		91,736		—		91,736
Common stock issued for warrants exercised	—	—		22,877,806	3		263,061		—		263,064
Cumulative effect of ASU 2016-02 adoption	—	—		—	—		—		(828)		(828)
Net loss	—	—		—	—		—		(228,632)		(228,632)
Balance as of September 30, 2020	—	$	—	384,083,110	$	39	$	1,483,724	$	(417,940)	$	1,065,823

(1) Issuance of Series D redeemable convertible preferred stock has been retroactively restated to give effect to the recapitalization transaction.

See accompanying notes to the consolidated financial statements.

8

NIKOLA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities
Net loss	$	(531,022)	$	(228,632)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,959		4,424
Stock-based compensation	151,983		91,736
Deferred income taxes	2		4
Non-cash in-kind services	40,230		28,642
Loss on forward contract liability	—		1,324
Equity in net loss of affiliates	3,067		—
Revaluation of warrant liability	(2,907)		(8,588)
Revaluation of derivative liability	(319)		—
Issuance of common stock for commitment shares	5,564		—
Loss on sale of equipment	1,008		—
Changes in operating assets and liabilities:
Inventory	(3,644)		—
Prepaid expenses and other current assets	(7,090)		271
Accounts payable, accrued expenses and other current liabilities	147,160		19,398
Long-term and customer deposits	(4,705)		6,823
Other long-term liabilities	(655)		—
Net cash used in operating activities	(195,369)		(84,598)
Cash flows from investing activities
Purchases and deposits of property, plant and equipment	(113,680)		(15,180)
Investments in affiliates	(25,000)		(15)
Proceeds from sale of equipment	200		—
Net cash used in investing activities	(138,480)		(15,195)
Cash flows from financing activities
Proceeds from issuance of Series D redeemable convertible preferred stock, net of issuance costs paid	—		50,349
Business Combination and PIPE financing, net of issuance costs paid	—		616,726
Proceeds from the exercise of stock options	4,194		2,204
Proceeds from the exercise of stock warrants, net of issuance costs paid	—		263,064
Proceeds from issuance of common stock under Stock Purchase Agreement	72,866		—
Proceeds from landlord of finance lease	—		889
Payments on finance lease liabilities	(759)		(789)
Proceeds from note payable	—		4,134
Payment of note payable	(4,100)		(4,134)
Payments for issuance costs	(644)		—
Net cash provided by financing activities	71,557		932,443
Net increase (decrease) in cash and cash equivalents, including restricted cash	(262,292)		832,650
Cash and cash equivalents, including restricted cash, beginning of period	849,278		89,832
Cash and cash equivalents, including restricted cash, end of period	$	586,986	$	922,482

See accompanying notes to the consolidated financial statements.

9

Supplementary cash flow disclosures:
Cash paid for interest	$	573	$	683
Cash interest received	$	456	$	887
Supplementary disclosures for noncash investing and financing activities:
Purchases of property, plant and equipment included in liabilities	$	21,001	$	2,136
Accrued deferred issuance costs	$	439	$	—
Non-cash prepaid in-kind services	$	—	$	63,358
Accrued Business Combination and PIPE transaction costs	$	—	$	285
Net liabilities assumed from VectoIQ	$	—	$	21,919
Leased assets obtained in exchange for new finance lease liabilities	$	11,125	$	—
Common stock issued for commitment shares	$	5,564	$	—
Common stock issued for investments in affiliates, including common stock with embedded put right	$	32,376	$	—
Settlement of forward contract liability	$	—	$	1,324
Acquired intangible assets included in liabilities	$	47,181	$	—

See accompanying notes to the consolidated financial statements.

10

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.BASIS OF PRESENTATION

(a)Overview

Nikola Corporation (‘‘Nikola’’ or the ‘‘Company’’) is a designer and manufacturer of heavy-duty commercial battery-electric and hydrogen-electric vehicles and energy infrastructure solutions.

On June 3, 2020 (the "Closing Date"), VectoIQ Acquisition Corp. ("VectoIQ"), consummated the previously announced merger pursuant to the Business Combination Agreement, dated March 2, 2020 (the "Business Combination Agreement"), by and among the VectoIQ, VCTIQ Merger Sub Corp., a wholly-owned subsidiary of VectoIQ incorporated in the State of Delaware ("Merger Sub"), and Nikola Corporation, a Delaware corporation ("Legacy Nikola"). Pursuant to the terms of the Business Combination Agreement, a business combination between the Company and Legacy Nikola was effected through the merger of Merger Sub with and into Legacy Nikola, with Legacy Nikola surviving as the surviving company and as a wholly-owned subsidiary of VectoIQ (the "Business Combination").

On the Closing Date, and in connection with the closing of the Business Combination, VectoIQ changed its name to Nikola Corporation. Legacy Nikola was deemed the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification ("ASC") 805. This determination was primarily based on Legacy Nikola's stockholders prior to the Business Combination having a majority of the voting interests in the combined company, Legacy Nikola's operations comprising the ongoing operations of the combined company, Legacy Nikola's board of directors comprising a majority of the board of directors of the combined company, and Legacy Nikola's senior management comprising the senior management of the combined company. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Nikola issuing stock for the net assets of VectoIQ, accompanied by a recapitalization. The net assets of VectoIQ are stated at historical cost, with no goodwill or other intangible assets recorded.

While VectoIQ was the legal acquirer in the Business Combination, because Legacy Nikola was deemed the accounting acquirer, the historical financial statements of Legacy Nikola became the historical financial statements of the combined company, upon the consummation of the Business Combination. As a result, the financial statements included in this report reflect (i) the historical operating results of Legacy Nikola prior to the Business Combination; (ii) the combined results of the Company and Legacy Nikola following the closing of the Business Combination; (iii) the assets and liabilities of Legacy Nikola at their historical cost; and (iv) the Company’s equity structure for all periods presented.

In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparative periods up to the Closing Date, to reflect the number of shares of the Company's common stock, $0.0001 par value per share, issued to Legacy Nikola's stockholders in connection with the recapitalization transaction. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Nikola redeemable convertible preferred stock and Legacy Nikola common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination Agreement. Activity within the statement of stockholders' equity for the issuances and repurchases of Legacy Nikola's redeemable convertible preferred stock, were also retroactively converted to Legacy Nikola common stock.

(b)Unaudited Consolidated Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”). The unaudited financial information reflects, in the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Company's financial position, results of operations and cash flows for the periods indicated. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2020.

Certain prior period balances were conformed to the restated consolidated financial statements, as previously disclosed in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2020, due to the accounting for warrant liabilities.

11

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated.

Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes.

All dollar amounts are in thousands, unless otherwise noted. Share and per share amounts are presented on a post-conversion basis for all periods presented, unless otherwise specified.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

(c)Funding Risks and Going Concern

As an early stage growth company, the Company's ability to access capital is critical. Until the Company can generate sufficient revenue to cover its operating expenses, working capital and capital expenditures, the Company will need to raise additional capital.

Additional stock financing may not be available on favorable terms and could be dilutive to current stockholders. Debt financing, if available, may involve restrictive covenants and dilutive financing instruments.

The Company’s ability to access capital when needed is not assured and, if capital is not available to the Company when, and in the amounts needed, the Company could be required to delay, scale back, or abandon some or all of its development programs and other operations, which could materially harm the Company’s business, financial condition and results of operations.

These financial statements have been prepared by management in accordance with GAAP and this basis assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. These financial statements do not include any adjustments that may result from the outcome of this uncertainty.

As of the date of this Quarterly Report on Form 10-Q, the Company’s existing cash resources and existing borrowing availability are sufficient to support planned operations for the next 12 months. As a result, management believes that the Company's existing financial resources are sufficient to continue operating activities for at least one year past the issuance date of the financial statements.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Cash, Cash Equivalents and Restricted Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. Additionally, the Company considers investments in money market funds with a floating net asset value to be cash equivalents. As of September 30, 2021 and December 31, 2020, the Company had $587.0 million and $840.9 million of cash and cash equivalents, which included cash equivalents of $539.0 million and $827.1 million of highly liquid investments at September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021 and December 31, 2020, the Company had zero and $8.4 million, respectively, in current and non-current restricted cash. Restricted cash represents cash that is restricted as to withdrawal or usage and primarily consists of refundable deposits and securitization of the Company's term loan.

The reconciliation of cash and cash equivalents and restricted cash and cash equivalents to amounts presented in the consolidated statements of cash flows are as follows:

12

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	As of
	September 30, 2021		December 31, 2020		September 30, 2020		December 31, 2019
Cash and cash equivalents	$	586,986	$	840,913	$	907,530	$	85,688
Restricted cash and cash equivalents – current	—		4,365		10,952		—
Restricted cash and cash equivalents – non-current	—		4,000		4,000		4,144
Cash, cash equivalents and restricted cash and cash equivalents	$	586,986	$	849,278	$	922,482	$	89,832

(b)Fair Value of Financial Instruments

The carrying value and fair value of the Company’s financial instruments are as follows:

	As of September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents – money market	$	538,950	$	—	$	—	$	538,950
Liabilities
Warrant liability	$	—	$	—	$	4,428	$	4,428
Derivative liability	—		—		7,386		7,386

	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents – money market	$	827,118	$	—	$	—	$	827,118
Restricted cash equivalents – money market	4,100		—		—		4,100
Liabilities
Warrant liability	$	—	$	—	$	7,335	$	7,335

In September 2019, Legacy Nikola entered into an agreement that required Legacy Nikola to issue, and the investor to purchase, Series D redeemable convertible preferred stock at a fixed price in April 2020 (the “Forward Contract Liability”), which was accounted for as a liability. The Forward Contract Liability was remeasured to its fair value each reporting period resulting in the recognition of zero and $1.3 million loss in other income (expense) on the consolidated statements of operations for the three and nine months ended September 30, 2020, respectively. The Forward Contract Liability was settled in April 2020 with the issuance of Series D redeemable convertible preferred stock.

In determining the fair value of the Forward Contract Liability, estimates and assumptions impacting fair value included the estimated future value of the Company's Series D redeemable convertible preferred stock, discount rates and estimated time to liquidity. The following reflects the significant quantitative inputs used:

	As of April 10, 2020
Estimated future value of Series D redeemable convertible preferred stock	$	10.00
Discount rate	—		%
Time to liquidity (years)	0

As a result of the Business Combination, the Company assumed a warrant liability (the "Warrant Liability") related to previously issued private warrants in connection with VectoIQ's initial public offering. The Warrant Liability was remeasured to its fair value at each reporting period and upon settlement. The change in fair value was recognized in revaluation of warrant liability on the consolidated statements of operations. The change in fair value of the Warrant Liability was as follows:

13

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	Warrant Liability
Estimated fair value at December 31, 2020	$	7,335
Change in fair value	(2,907)
Estimated fair value at September 30, 2021	$	4,428

The fair value of the warrants outstanding was estimated using the Black-Scholes model. The application of the Black-Scholes model requires the use of a number of inputs and significant assumptions including volatility. The following reflects the inputs and assumptions used:

	As of
	September 30, 2021			December 31, 2020
Stock price	$	10.67		$	15.26
Exercise price	$	11.50		$	11.50
Remaining term (in years)	3.67			4.42
Volatility	80		%	75		%
Risk-free rate	0.68		%	0.30		%
Expected dividend yield	—		%	—		%

On June 22, 2021 (the "WVR Closing Date"), the Company entered into a Membership Interests Purchase Agreement (the “Original MIPA”) with Wabash Valley Resources LLC (“WVR”) and the sellers party thereto (collectively, the “Sellers”), pursuant to which, the Company purchased a 20% equity interest in WVR in exchange for cash and the Company’s common stock (see Note 6, Investments). Under the Original MIPA, each Seller had a right but not the obligation, in its sole discretion, to cause the Company to purchase a portion of such Seller’s Shares outside the specified blackout windows, at $14.86 per share of common stock (the "Put Right") with a maximum share repurchase of $10.0 million in aggregate. The potential cash settlement from the shares of common stock subject to the Put Right and the fair value of the embedded Put Right was recorded in temporary equity.

The fair value of the Put Right, a level 3 measurement, was estimated using a Monte Carlo simulation model. The application of the Monte Carlo simulation model requires the use of a number of inputs and significant assumptions including volatility. The fair value of the Put Right was $3.2 million as of the WVR Closing Date. The following reflects the inputs and assumptions used:

	As of
	June 22, 2021
Stock price	$	17.32
Strike Price	$	14.86
Volatility	95		%
Risk-free rate	0.10		%

On September 13, 2021, the Company entered into an Amended Membership Interest Purchase Agreement (the "Amended MIPA") with WVR and the Sellers, pursuant to which the Seller's rights to cause the Company to purchase a portion of such Seller's shares, the Put Right, was removed in its entirety and replaced with the first price differential and second price differential (together the "Price Differential"). The first price differential is equal to $14.86 (the "Issue Price"), less the average closing price for shares of the Company's common stock for the 15 consecutive days immediately following September 20, 2021. The second price differential is equal to the Issue Price less the average closing price for shares of the Company's common stock for the five consecutive days immediately following June 20, 2022. If the first price differential is positive, the Company is obligated to pay to each Seller an amount equal to the product of 50% of such Seller's portion of the closing stock consideration and the first price differential on October 12, 2021. If the second price differential is positive, the Company is obligated to pay to each Seller an amount equal to the product of 50% of such Seller's portion of the closing stock consideration

14

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

and the second price differential on June 28, 2022. Under the Amended MIPA, the Company's maximum obligation is $10.0 million in aggregate.

As a result of the Amended MIPA, the shares of common stock with the embedded Put Right were deemed modified and $13.2 million was reclassified from temporary equity to equity on the consolidated balance sheets. The Price Differential is a freestanding financial instrument and accounted for as a derivative liability. The fair value of the derivative at modification was $7.7 million and was recognized in accrued expenses and other current liabilities on the consolidated balance sheets, resulting in a net impact of $5.5 million to equity.

The derivative liability will be remeasured at each reporting period with changes in its fair value recorded in other income (expense), net on the consolidated statements of operations. The change in fair value of the derivative liability was as follows:

	Derivative Liability
Estimated fair value at September 13, 2021	$	7,705
Change in fair value	(319)
Estimated fair value at September 30, 2021	$	7,386

The fair value of the derivative liability, a level 3 measurement, was estimated using a Monte Carlo simulation model. The application of the Monte Carlo simulation model requires the use of a number of inputs and significant assumptions including volatility. The following reflects the inputs and assumptions used:

	As of
	September 13, 2021			September 30, 2021
Stock Price	$	10.03		$	10.67
Strike Price	$	14.86		$	14.86
Volatility	95		%	95		%
Risk-free rate	0.07		%	0.07		%

(c)Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

There have been no recently issued accounting pronouncements or changes in accounting pronouncements not yet adopted that are applicable or material to the Company as of September 30, 2021.

Recently adopted accounting pronouncements

In December 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted the ASU on January 1, 2021 and it did not have a material impact on the Company's consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer's accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for convertible debt instruments wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share. The treasury method will no longer be available. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and

15

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the year. The Company early adopted the ASU on January 1, 2021, and there was no impact to the Company's consolidated financial statements.

In January 2020, the FASB issued ASU No. 2020-01, Investments – Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815), which addresses accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted the ASU on January 1, 2021 and it did not have a material impact on the Company's consolidated financial statements.

3. BUSINESS COMBINATION

On June 3, 2020, the Company and VectoIQ consummated the merger contemplated by the Business Combination Agreement, with Legacy Nikola surviving the merger as a wholly-owned subsidiary of VectoIQ. Immediately prior to the closing of the Business Combination, all shares of outstanding redeemable convertible preferred stock of Legacy Nikola were automatically converted into shares of Legacy Nikola common stock. Upon the consummation of the Business Combination, each share of Legacy Nikola common stock issued and outstanding was canceled and converted into the right to receive 1.901 shares (the "Exchange Ratio") of the Company's common stock (the "Per Share Merger Consideration").

Upon the closing of the Business Combination, VectoIQ's certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of all classes of capital stock to 750,000,000 shares, of which 600,000,000 shares were designated common stock, $0.0001 par value per share, and of which 150,000,000 shares were designated preferred stock, $0.0001 par value per share.

In connection with the execution of the Business Combination Agreement, VectoIQ entered into separate subscription agreements (each, a "Subscription Agreement") with a number of investors (each a "Subscriber"), pursuant to which the Subscribers agreed to purchase, and VectoIQ agreed to sell to the Subscribers, an aggregate of 52,500,000 shares of the Company's common stock (the "PIPE Shares"), for a purchase price of $10.00 per share and an aggregate purchase price of $525.0 million, in a private placement pursuant to the subscription agreements (the "PIPE"). The PIPE investment closed simultaneously with the consummation of the Business Combination.

Prior to the closing of the Business Combination, Legacy Nikola repurchased 2,850,930 shares of Legacy Nikola's Series B redeemable convertible preferred stock at the price of $8.77 per share for an aggregate purchase price of $25.0 million pursuant to a Series B preferred stock repurchase agreement (the "Repurchase Agreement") with Nimbus Holdings LLC ("Nimbus"). The repurchase is retrospectively adjusted in the statement of stockholders' equity to reflect the Company’s equity structure for all periods presented.

Immediately following the Business Combination, pursuant to a redemption agreement, Nikola redeemed 7,000,000 shares of common stock from M&M Residual, LLC ("M&M Residual") at a purchase price of $10.00 per share. See Note 7, Related Party Transactions, for further details on the transaction.

The Business Combination is accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, VectoIQ was treated as the "acquired" company for financial reporting purposes. See Note 1, Basis of Presentation, for further details. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Nikola issuing stock for the net assets of VectoIQ, accompanied by a recapitalization. The net assets of VectoIQ are stated at historical cost, with no goodwill or other intangible assets recorded.

Prior to the Business Combination, Legacy Nikola and VectoIQ filed separate standalone federal, state and local income tax returns. As a result of the Business Combination, structured as a reverse acquisition for tax purposes, Legacy Nikola, which was renamed Nikola Subsidiary Corporation in connection with the Business Combination (f/k/a Nikola Corporation), became the parent of the consolidated tax filing group, with Nikola Corporation (f/k/a VectoIQ Acquisition Corp.) as a subsidiary.

The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows and the consolidated statement of changes in equity for the nine months ended September 30, 2020:

16

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	Recapitalization
Cash - VectoIQ's trust and cash (net of redemptions)	$	238,358
Cash - PIPE	525,000
Less: transaction costs and advisory fees paid	(51,210)
Less: VectoIQ loan payoff in conjunction with close	(422)
Less: M&M Residual redemption	(70,000)
Less: Nimbus repurchase	(25,000)
Net Business Combination and PIPE financing	616,726
Less: non-cash net liabilities assumed from VectoIQ	(21,919)
Less: accrued transaction costs and advisory fees	(285)
Net contributions from Business Combination and PIPE financing	$	594,522

The number of shares of common stock issued immediately following the consummation of the Business Combination:

	Number of Shares
Common stock, outstanding prior to Business Combination	22,986,574
Less: redemption of VectoIQ shares	(2,702)
Common stock of VectoIQ	22,983,872
VectoIQ Founder Shares	6,640,000
Shares issued in PIPE	52,500,000
Less: M&M Residual redemption	(7,000,000)
Less: Nimbus repurchase	(2,850,930)
Business Combination and PIPE financing shares	72,272,942
Legacy Nikola shares (1)	288,631,536
Total shares of common stock immediately after Business Combination	360,904,478

(1) The number of Legacy Nikola shares was determined from the 151,831,441 shares of Legacy Nikola common stock outstanding immediately prior to the closing of the Business Combination converted at the Exchange Ratio of 1.901. All fractional shares were rounded down.

4.BALANCE SHEET COMPONENTS

Inventory

Inventory includes raw materials and purchased components in support of the pre-series Nikola Tre BEV builds which commenced in October 2021, and consists of the following:

	As of
	September 30, 2021
Raw materials	$	3,644
Work in process	—
Finished goods	—
Total inventory	$	3,644

Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis.

17

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Property, Plant and Equipment

Property, plant and equipment consist of the following at September 30, 2021 and December 31, 2020:

	As of
	September 30, 2021		December 31, 2020
Buildings	$	58,708	$	—
Machinery and equipment	31,141		14,820
Furniture and fixtures	1,480		1,480
Leasehold improvements	2,854		1,488
Software	6,552		4,285
Finance lease assets	40,380		34,775
Construction-in-progress	65,276		21,218
Other	2,979		1,750
Property, plant and equipment, gross	209,370		79,816
Less: accumulated depreciation and amortization	(8,715)		(8,415)
Total property, plant and equipment, net	$	200,655	$	71,401

Construction-in-progress on the Company's consolidated balance sheets as of September 30, 2021 relates primarily to the build out of the BEV charging mobile infrastructure and construction of the Company's manufacturing plant in Coolidge, Arizona. The Company placed Phase 0.5 of the plant in service in July 2021.

During the third quarter of 2021, the Company issued a notice indicating its intent to exercise the purchase option on its headquarters and R&D facility in Phoenix, Arizona for $25.1 million. As of the issuance of the notice, the lease liability was remeasured resulting in a $10.5 million remeasurement adjustment to the lease liability and a corresponding increase to the finance lease asset. The Company anticipates the purchase of its headquarters will be completed in the fourth quarter of 2021.

Depreciation expense for the three months ended September 30, 2021 and 2020 was $2.2 million and $1.5 million, respectively. Depreciation expense for the nine months ended September 30, 2021 and 2020 was $5.9 million and $4.4 million, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following at September 30, 2021 and December 31, 2020:

	As of
	September 30, 2021		December 31, 2020
Accrued payroll and payroll related expenses	$	3,563	$	1,105
Accrued deferred issuance costs	439		285
Accrued outsourced engineering services	6,438		2,514
Accrued purchases of property, plant and equipment	3,878		2,533
Accrued legal expenses	5,373		8,845
Derivative liability	7,386		—
Accrued purchase of intangible asset	11,577		—
Legal loss contingency	125,000		—
Other accrued liabilities	7,230		2,457
Total accrued expenses and other current liabilities	$	170,884	$	17,739

5. INTANGIBLE ASSETS

18

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The gross carrying amount and accumulated amortization of separately identifiable intangible assets are as follows:

	As of September 30, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Licenses	$	97,181	$	—	$	97,181
Total intangible assets	$	97,181	$	—	$	97,181

	As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Licenses	$	50,150	$	(100)	$	50,050
Total intangible assets	$	50,150	$	(100)	$	50,050

During the third quarter of 2021, the Company was granted a non-exclusive and non-transferable license to intellectual property that will be used to adapt, further develop and assemble fuel cell power modules ("FCPMs") for use in the production of fuel cell electric vehicles ("FCEV"). The license was accounted for as an asset acquisition and the accumulated cost of the license was determined to be 40 million euros or $47.2 million. As of September 30, 2021, the Company recognized 10 million euros or $11.6 million in accrued expenses and other current liabilities and 30 million euros or $34.7 million in other long-term liabilities related to the payments for the license, which will be made in four installments from 2022 through 2023. The Company will amortize the license beginning at the start of production for FCEVs. As of September 30, 2021, the Company has not started amortizing the license.

Amortization expense for the three and nine months ended September 30, 2021 and 2020 was not material. The Company will begin amortization of the $50.0 million intellectual property license for the S-Way platform obtained from Iveco at the start of production. As of September 30, 2021, production has not commenced.

6. INVESTMENTS IN AFFILIATES

Nikola Iveco Europe GmbH

The Company and Iveco are parties to a series of agreements which established a joint venture in Europe, Nikola Iveco Europe GmbH. The operations of the joint venture are located in Ulm, Germany, and consist of manufacturing the battery-electric ("BEV") and FCEV Class 8 trucks for the European market, as well as for the North American market while the Company's greenfield manufacturing facility in Coolidge, Arizona, is being completed.

The agreements provide for a 50/50 ownership of the joint venture and a 50/50 allocation of the joint venture's production volumes and profits between the Company and Iveco. Both parties are entitled to appoint an equal number of members to the shareholders' committee of the joint venture. Pursuant to the terms of the agreements, the Company and Iveco each contributed intellectual property licenses to their respective technology. During 2020, the Company contributed $8.8 million for a 50% interest in the joint venture, in accordance with the amended contribution agreement. The intellectual property licenses contributed to the joint venture by Nikola are related to intellectual property related to Nikola-developed BEV and FCEV technology for use in the European market. Iveco contributed to the joint venture a license for the S-WAY technology for use in the European market.

Nikola Iveco Europe GmbH is considered a variable interest entity ("VIE") due to insufficient equity to finance its activities without additional subordinated financial support. The Company is not considered the primary beneficiary as it does not have the power to direct the activities that most significantly impact the economic performance based on the terms of the agreements. Accordingly, the VIE is accounted for under the equity method.

19

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of September 30, 2021 and December 31, 2020, the carrying amount of the Company's equity interest was $4.8 million and $8.4 million, respectively, and is included in investment in affiliates on the consolidated balance sheets. Equity in net loss of affiliates on the consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020, is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Equity in net loss of affiliates	$	(1,359)	$	—	$	(3,279)	$	—

During the third quarter of 2021, the joint venture executed a term loan facility agreement for 15.0 million euros ($17.4 million as of September 30, 2021) with a 5 year term and a revolving credit facility agreement for 6.0 million euros ($7.0 million as of September 30, 2021) with a 4 year term. Each agreement was guaranteed 50% by the Company and 50% by Iveco. As of September 30, 2021, the Company's maximum exposure to loss was $17.0 million, which represents the book value of the Company's equity interest and guaranteed debt obligations of $12.2 million.

Wabash Valley Resources LLC

On June 22, 2021, the Company entered into the Original MIPA with WVR and the Sellers, pursuant to which, the Company purchased a 20% equity interest in WVR in exchange for $25.0 million in cash and 1,682,367 shares of the Company’s common stock. WVR is developing a clean hydrogen project in West Terre Haute, Indiana, including a hydrogen production facility. The common stock consideration was calculated based on the 30-day average closing stock price of the Company, or $14.86 per share, and the Company issued 1,682,367 shares of its common stock. As of the WVR Closing Date, the fair value of the stock consideration and Put Right was $32.4 million, based upon the closing price of the Company's common stock as of the WVR Closing Date and the fair value of the embedded Put Right (see Note 2).

The Company's interest in WVR is accounted for under the equity method and is included in investment in affiliates on the consolidated balance sheets. As of the WVR Closing Date, the fair value of the Company's investment in WVR was approximately $57.4 million, which consists of the Company's cash, common stock consideration, and the Put Right. The common stock consideration subject to the Put Right was originally classified as temporary equity on the consolidated balance sheets for $13.2 million which includes the fair value of the embedded Put Right of $3.2 million. Subsequently, the Put Right was removed and replaced with the Price Differential. See Note 2, Summary of Significant Accounting Policies, for further details. Refer below for a reconciliation of the fair value of the Company's investment in WVR:

	Investment in WVR
Common stock issued for investment in affiliates including common stock subject to Put Right	$	29,139
Cash consideration for investment in affiliates	25,000
Fair value of cash and common stock consideration for WVR	54,139
Fair value of embedded Put Right	3,237
Total investment in affiliates	$	57,376

The excess of the initial fair value of the Company's investment over the underlying equity in the carrying value of the net assets of WVR has not yet been allocated within the investment account. The Company expects to complete the allocation by the end of fiscal year 2021.

As of September 30, 2021 and December 31, 2020, the carrying amount of the Company's equity interest was $57.6 million and zero, respectively, and is included in investment in affiliates on the consolidated balance sheets. Equity in net loss of affiliates on the consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020, is as follows:

20

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Equity in net earnings of affiliate	$	212	$	—	$	212	$	—

The Company does not guarantee debt for, or have other financial support obligations to the entity and its maximum exposure to loss in connection with its continuing involvement with the entity is limited to the carrying amount of the investment.

7. RELATED PARTY TRANSACTIONS

Related Party Aircraft Charter Agreement

The Company previously entered into an aircraft charter arrangement with its former Executive Chairman of the board of directors and Legacy Nikola's former Chief Executive Officer. During the three and nine months ended September 30, 2020, the Company recognized expense of $1.1 million and $1.3 million, respectively, for the business use of the aircraft. The aircraft charter arrangement was terminated effective October 2020 and there are no such amounts to report subsequent to the termination date.

Related Party Income

During the three and nine months ended September 30, 2020, the Company recorded an immaterial amount for the provision of solar installation services to the former Executive Chairman, which were billed on a time and materials basis. Solar installation services were terminated effective October 2020 and there are no such amounts to report subsequent to the termination date.

Related Party Redemption of Common Stock

Immediately following the Business Combination, pursuant to a redemption agreement, the Company redeemed 7,000,000 shares of common stock from M&M Residual at a purchase price of $10.00 per share, payable in immediately available funds. The number of shares to be redeemed and the redemption price were determined and agreed upon during negotiations between the various parties to the Business Combination, including the former Executive Chairman and representatives of VectoIQ, Legacy Nikola and the Subscribers.

Former Related Party License and Service Agreements

During the three and nine months ended September 30, 2020, the Company issued zero and 9,443,353 shares of Series D redeemable convertible preferred stock to Iveco S.p.A ("Iveco"), a former related party, in exchange for zero and $92.0 million of prepaid in-kind services, respectively. During the three months ended September 30, 2021 and 2020, $12.5 million and $11.4 million, respectively, of in-kind services were recognized in research and development on the consolidated statements of operations. During the nine months ended September 30, 2021 and 2020, $40.2 million and $28.6 million, respectively, of in-kind services were recognized in research and development on the consolidated statements of operations. As of September 30, 2021 and December 31, 2020, $6.0 million and $46.3 million prepaid in-kind services, respectively, were reflected on the consolidated balance sheets.

During the three and nine months ended September 30, 2020 the Company issued zero and 5,132,289 shares, respectively, of Series D redeemable convertible preferred stock to Iveco, in exchange for zero and $50.0 million in cash, respectively. As of June 3, 2020, Iveco was no longer considered a related party under ASC 850.

Former Related Party Research and Development

During the three and nine months ended September 30, 2020, the Company recorded research and development expenses of $4.1 million and $10.6 million, respectively, from a former related party. As of June 3, 2020, the entity was no longer considered a related party and as a result there are no such amounts to report for the three and nine months ended September 30, 2021.

21

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Former Related Party Stock Repurchase

In March 2020, the Company entered into a letter agreement with Nimbus in which Nimbus agreed to terminate the Nimbus redemption letter agreement dated August 3, 2018. Concurrently, the Company entered into an agreement with Nimbus, whereby the Company agreed to repurchase 2,850,930 shares of Series B preferred stock from Nimbus at a share price of $8.77 for an aggregate repurchase price of $25.0 million. The parties agreed that the repurchase price constituted the price that Nimbus would otherwise be entitled to under the Nimbus redemption letter agreement. The number of shares to be repurchased was negotiated by the Company and Nimbus as a mechanism to compensate Nimbus for agreeing to relinquish its previous redemption rights granted in the Nimbus redemption letter agreement.

The repurchase was contingent on completion of the Business Combination which occurred during the second quarter of 2020, and the Company repurchased the shares in conjunction with the closing of the Business Combination (see Note 3, Business Combination).

As of June 3, 2020, Nimbus was no longer considered a related party.

8. DEBT

Term Note

Debt consisted of a term note of zero and $4.1 million as of September 30, 2021 and December 31, 2020.

In January 2018, the Company entered into a term note with JP Morgan Chase, pursuant to which the Company borrowed $4.1 million to fund equipment purchases. The term note accrued interest at 2.43% per annum and was payable on or before January 31, 2019. The term note was secured by restricted cash.

In February 2019, the Company amended the term note to extend its term by one year and increased the interest rate to 3.00% per annum. In February 2020, the Company further amended the term note and extended its term for one year, to January 31, 2021. The term note accrued interest at a rate equal to the LIBOR rate for the applicable interest period multiplied by the statutory reserve rate as determined by the Federal Reserve Board.

During the first quarter of 2021, the Company repaid the $4.1 million term note.

Payroll Protection Program Note

In April 2020, the Company entered into a note with JP Morgan Chase under the Small Business Administration Paycheck Program established under Section 1102 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, pursuant to which the Company borrowed $4.1 million (the "Note"). The Note accrued interest at a rate of 0.98% per annum and matured in 24 months. On April 30, 2020, the Company returned the $4.1 million in proceeds from the Note to JP Morgan Chase.

9. CAPITAL STRUCTURE

Shares Authorized

As of September 30, 2021, the Company had a total of 750,000,000 shares authorized for issuance with 600,000,000 shares designated as common stock and 150,000,000 shares designated as preferred stock.

Warrants

As of September 30, 2021, the Company had 760,915 private warrants outstanding. Each private warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment, at any time commencing 30 days after the completion of the Business Combination. For the three months ended September 30, 2021 and 2020, the Company recorded a $4.5 million and $37.7 million gain, respectively, for revaluation of warrant liability on the consolidated statements of operations. For the nine months ended September 30, 2021 and 2020, the Company recorded a $2.9 million and $8.6 million gain, respectively, for revaluation of warrant liability on the consolidated statements of operations.

22

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of September 30, 2021 and December 31, 2020, the Company had $4.4 million and $7.3 million, respectively, for warrant liability related to the private warrants outstanding on the consolidated balance sheets.

The exercise price and number of common stock issuable upon exercise of the private warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the private warrants will not be adjusted for issuance of common stock at a price below their exercise price.

Stock Purchase Agreements

Purchase Agreement with Tumim Stone Capital LLC

On June 11, 2021, the Company entered into a common stock purchase agreement (the "Purchase Agreement") and a registration rights agreement (the "Registration Rights Agreement") with Tumim Stone Capital LLC ("Tumim"), pursuant to which Tumim has committed to purchase up to $300 million in shares of the Company's common stock, subject to certain limitations and conditions set forth in the Purchase Agreement. The Company shall not issue or sell any shares of common stock under the Purchase Agreement which, when aggregated with all other shares of common stock beneficially owned by Tumim, would result in beneficial ownership of more than 4.99% of the Company's outstanding shares of common stock.

Under the terms of the Purchase Agreement, the Company has the right, but not the obligation, to sell to Tumim, shares of common stock over the period commencing on the date of the Purchase Agreement (the “Tumim Closing Date”) and ending on the first day of the month following the 36-month anniversary of the Tumim Closing Date, provided that a registration statement covering the resale of shares of common stock that have been and may be issued under the Purchase Agreement is declared effective by the SEC. The registration statement covering the offer and sale of up to 18,012,845 shares of common stock to Tumim was declared effective on June 30, 2021. The purchase price will be calculated as 97% of the volume weighted average prices of the Company's common stock during normal trading hours for three consecutive trading days commencing on the purchase notice date.

Concurrently with the signing of the Purchase Agreement, the Company issued 155,703 shares of its common stock to Tumim as a commitment fee ("Commitment Shares"). The total fair value of the shares issued for the commitment fee of $2.6 million was recorded in selling, general, and administrative expense on the Company's consolidated statements of operations.

During the three and nine months ended September 30, 2021, the Company sold 6,270,740 shares of common stock for proceeds of $72.9 million under the terms of the Purchase Agreement. As of September 30, 2021, the remaining commitment available under the Purchase Agreement is $227.1 million.

Second Purchase Agreement with Tumim Stone Capital LLC

On September 24, 2021, the Company entered into a second common stock purchase agreement (the "Second Purchase Agreement") and a registration rights agreement with Tumim, pursuant to which Tumim has committed to purchase up to $300.0 million in shares of the Company's common stock, subject to certain limitations and conditions set forth in the Second Purchase Agreement. The Company will not issue or sell any shares of common stock under the Second Purchase Agreement which, when aggregated with all other shares of common stock beneficially owned by Tumim, would result in beneficial ownership of more than 4.99% of the Company's outstanding shares of common stock.

Under the terms of the Second Purchase Agreement, the Company has the right, but not the obligation, to sell to Tumim, shares of common stock over the period commencing on the date of the Second Purchase Agreement (the “Second Tumim Closing Date”) and ending on the first day of the month following the 36-month anniversary of the Second Tumim Closing Date, provided that certain conditions have been met. These conditions includes effectiveness of a registration statement covering the resale of shares of common stock that have been and may be issued under the Second Purchase Agreement and termination of the Purchase Agreement. The purchase price will be calculated as 97% of the volume weighted average prices of the Company's common stock during normal trading hours for three consecutive trading days commencing on the purchase notice date.

Concurrently with the signing of the Second Purchase Agreement, the Company issued 252,040 shares of its common stock to Tumim as a commitment fee. The total fair value of the shares issued for the commitment fee of $2.9 million was recorded in selling, general, and administrative expense on the Company's consolidated statement of operations.

23

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of September 30, 2021, the Company has not sold any shares of common stock to Tumim under the terms of the Second Purchase Agreement and has a remaining commitment of $300 million available.

10. STOCK BASED COMPENSATION EXPENSE

2017 and 2020 Stock Plans

Legacy Nikola's 2017 Stock Option Plan (the “2017 Plan”) provides for the grant of incentive and nonqualified options to purchase Legacy Nikola common stock to officers, employees, directors, and consultants of Legacy Nikola. Options are granted at a price not less than the fair market value on the date of grant and generally become exercisable between one and four years after the date of grant. Options generally expire ten years from the date of grant. Outstanding awards under the 2017 Plan continue to be subject to the terms and conditions of the 2017 Plan.

Each Legacy Nikola option from the 2017 Plan that was outstanding immediately prior to the Business Combination, whether vested or unvested, was converted into an option to purchase a number of shares of common stock (each such option, an "Exchanged Option") equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Legacy Nikola common stock subject to such Legacy Nikola option immediately prior to the Business Combination and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Legacy Nikola option immediately prior to the consummation of the Business Combination, divided by (B) the Exchange Ratio. Except as specifically provided in the Business Combination Agreement, following the Business Combination, each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Legacy Nikola option immediately prior to the consummation of the Business Combination. All stock option activity was retroactively restated to reflect the Exchanged Options.

At the Company's special meeting of stockholders held on June 2, 2020, the stockholders approved the Nikola Corporation 2020 Stock Incentive Plan (the "2020 Plan") and the Nikola Corporation 2020 Employee Stock Purchase Plan (the "2020 ESPP"). The 2020 Plan and the 2020 ESPP were previously approved, subject to stockholder approval, by the Company's board of directors on May 6, 2020. The aggregate number of shares authorized for issuance under the 2020 Plan will not exceed 42,802,865, plus the number of shares subject to outstanding awards as of the closing of the Business Combination under the 2017 Plan that are subsequently forfeited or terminated. The aggregate number of shares available for issuance under the 2020 ESPP is 4,000,000.

The 2020 Plan provides for the grant of incentive and nonqualified stock option, restricted stock units ("RSUs"), restricted share awards, stock appreciation awards, and cash-based awards to employees, outside directors, and consultants of the Company. The 2020 Plan and the 2020 ESPP became effective immediately upon the closing of the Business Combination. No offerings have been authorized to date by the Company's board of directors under the ESPP.

Stock Options

The Company utilizes the Black-Scholes option pricing model for estimating the fair value of options granted. Options vest in accordance with the terms set forth in the grant letter. Time-based options generally vest ratably over a period of approximately 36 months. Changes in stock options are as follows:

	Options	Weighted Average Exercise Price Per share		Weighted Average Remaining Contractual Term (Years)
Outstanding at December 31, 2020	32,529,224	$	1.28	7.82
Granted	—	$	—
Exercised	3,182,359	$	1.25
Cancelled	47,023	$	2.71
Outstanding at September 30, 2021	29,299,842	$	1.28	7.12
Vested and exercisable as of September 30, 2021	28,683,443	$	1.25	7.10

24

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Restricted Stock Units

The fair value of RSUs is based on the closing price of the Company’s common stock on the grant date. The time-based RSUs generally vest semi-annually over a three year period or, in the case of executive officers, cliff-vest following the third anniversary from the date of grant. Certain RSUs awarded to key employees contain performance conditions related to achievement of strategic and operational milestones ("Performance RSUs"). As of September 30, 2021, not all of the performance conditions are probable to be achieved. Compensation expense has only been recognized for those conditions that are assumed to be probable. The Company updates its estimates related to the probability and timing of achievement of the operational milestones each period until the award either vests or is forfeited. In addition, for certain technical engineering employees the awards cliff vest after a three year period or vest on the achievement of certain operational milestones. The RSUs to directors have a vesting cliff of one year after the grant date. Changes in RSUs are as follows:

	Number of RSUs
Balance at December 31, 2020	5,026,531
Granted	8,410,816
Released	1,721,686
Cancelled	714,136
Balance at September 30, 2021	11,001,525

Market Based RSUs

The fair value of Market Based RSUs was determined using a Monte Carlo simulation model that utilizes significant assumptions, including volatility, that determine the probability of satisfying the market condition stipulated in the award to calculate the fair value of the award. The Market Based RSUs contain a stock price index as a benchmark for vesting. These awards have three milestones that each vest depending upon a consecutive 20-trading day stock price target of the Company’s common stock. The shares vested are transferred to the award holders upon the completion of the requisite service period ending June 3, 2023, and upon achievement certification by the Company's board of directors. If the target price for the tranche is not achieved by the end of requisite service period, the Market Based RSUs are forfeited. Changes in Market Based RSUs are as follows:

	Number of Market Based RSUs
Balance at December 31, 2020	13,317,712
Granted	—
Released	—
Cancelled	—
Balance at September 30, 2021	13,317,712

Stock Compensation Expense

The following table presents the impact of stock-based compensation expense on the consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Research and development	$	6,418	$	4,612	$	26,968	$	7,850
Selling, general, and administrative	42,629		47,584		125,015		83,886
Total stock-based compensation expense	$	49,047	$	52,196	$	151,983	$	91,736

As of September 30, 2021, total unrecognized compensation expense was as follows:

25

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	Unrecognized Compensation Expense
Options	$	1,228
Market Based RSUs	195,639
RSUs	162,779
Total unrecognized compensation expense at September 30, 2021	$	359,646

11. INCOME TAXES

To calculate the interim tax provision, at the end of each interim period the Company estimates the annual effective tax rate and applies that to its ordinary quarterly earnings. The effect of changes in the enacted tax laws or rates is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and judgments including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences between book and tax amounts, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or the tax environment changes.

Income tax expense was immaterial for the three and nine months ended September 30, 2021 and 2020.

12. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is subject to legal and regulatory actions that arise from time to time. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable, often involves significant judgment about future events, and the outcome of litigation is inherently uncertain. The Company expenses professional legal fees as incurred, which are included in selling, general, and administrative expense on the consolidated financial statements. Other than as described below, there is no material pending or threatened litigation against the Company that remains outstanding as of September 30, 2021.

Regulatory and Governmental Investigations and Related Internal Review

On September 10, 2020, Hindenburg Research LLC reported on certain aspects of the Company’s business and operations. The Company and its board of directors retained Kirkland & Ellis LLP to conduct an internal review in connection with the Hindenburg article (the “Internal Review”), and Kirkland & Ellis promptly contacted the Division of Enforcement of the U.S. Securities and Exchange Commission to make it aware of the commencement of the Internal Review. The Company subsequently learned that the Staff of the Division of Enforcement had previously opened an investigation. On September 14, 2020, the Company and five of its officers and employees, including Mark Russell, our Chief Executive Officer, received subpoenas from the Staff of the Division of Enforcement as a part of a fact-finding inquiry related to aspects of the Company’s business as well as certain matters described in the Hindenburg article. The Staff of the Division of Enforcement issued additional subpoenas to another three of the Company’s officers and employees, including Kim Brady, the Company's Chief Financial Officer, on September 21, 2020 and to the Company’s current and former directors on September 30, 2020.

The Company and Mr. Milton also received grand jury subpoenas from the U.S. Attorney’s Office for the Southern District of New York (the “SDNY”) on September 19, 2020. On September 20, 2020, Mr. Milton offered to voluntarily step down from his position as Executive Chairman, as a member of the Company’s board of directors, including all committees thereof, and from all positions as an employee and officer of the Company. The board accepted his resignation and appointed Stephen Girsky as Chairman of the board of directors. The Company subsequently has appointed three new board members, Steve Shindler, Bruce Smith and Mary Petrovich.

The Company also received a grand jury subpoena from the N.Y. County District Attorney’s Office on September 21, 2020. On October 16, 2020, the N.Y. County District Attorney’s Office agreed to defer its investigation; it has not withdrawn its subpoena issued to the Company, but has informed the Company that no further productions to it are necessary at this time.

26

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On October 28, 2020, the Company received an information request from The Nasdaq Stock Market LLC, seeking an update on the status of the Staff of the Division of Enforcement and SDNY inquiries, which the Company provided.

On March 24, 2021, the Staff of the Division of Enforcement issued an additional subpoena to the Company related to its projected 2021 cash flow and anticipated use of funds from 2021 capital raises.

The Company is committed to cooperating fully with the Staff of the Division of Enforcement and the SDNY investigations, which are ongoing. As such, the Company's counsel frequently engages with the Staff of the Division of Enforcement and the SDNY. Further, the Company has made voluminous productions of information and made witnesses available for interviews. The Company will continue to comply with the requests of the Staff of the Division of Enforcement and the SDNY and expect to make additional productions in the future. The documents and information requested in the subpoenas include materials concerning Mr. Milton’s and the Company’s statements regarding the Company’s business operations and the future of the Company.

As part of the Internal Review, which has been substantially completed, Kirkland & Ellis had full access to Company data, emails and documents for collection and review. No request by Kirkland & Ellis for information from the Company was denied. Kirkland & Ellis was also given access to data contained on personal devices for over three dozen of our employees. Kirkland & Ellis, including with the assistance of contract attorneys, reviewed relevant documents in the legal, investor relations, finance, and human resources areas as well as Company emails from January 1, 2016 through December 31, 2020, employee text messages, documents found in our data room and other corporate documents. The Internal Review also included targeted interviews of over thirty (30) Company personnel. Additionally, as part of the Internal Review, Kirkland & Ellis retained automotive experts ("Automotive Experts") at a well-known consulting firm to conduct an independent assessment of the current state of our technology development. Refer to Note 14, Commitments and Contingencies, withinthe Company's Annual Report on Form 10-K/A for the year ended December 31, 2020, for further details.

The legal and other professional costs the Company incurred during the three and nine months ended September 30, 2021 in connection with the Internal Review and disclosed elsewhere in this Quarterly Report include approximately $6.4 million and $12.6 million, respectively, expensed for Mr. Milton’s attorneys’ fees under his indemnification agreement with the Company. As of September 30, 2021 and December 31, 2020 the Company accrued approximately $12.8 million and $6.6 million, respectively, in legal and other professional costs for Mr. Milton's attorneys' fees under his indemnification agreement. The Company expects to incur additional costs associated with the Staff of the Division of Enforcement and the SDNY investigations and the Internal Review during fiscal year 2021, which will be expensed as incurred and which could be significant in the periods in which they are recorded.

On July 29, the U.S. Attorney for the SDNY announced the unsealing of a criminal indictment charging Trevor Milton with two counts of securities fraud and one count of wire fraud. That same day, the Securities and Exchange Commission announced charges against Mr. Milton for alleged violations of federal securities laws.

The Company cannot predict the ultimate outcome of the Staff of the Division of Enforcement and the SDNY investigations or the litigation against Mr. Milton, nor can it predict whether any other governmental authorities will initiate separate investigations or litigation. The outcome of the Staff of the Division of Enforcement and the SDNY investigations and any related legal and administrative proceedings could include a wide variety of outcomes, including the institution of administrative, civil injunctive or criminal proceedings involving the Company and/or current or former employees, officers and/or directors in addition to Mr. Milton, the imposition of fines and other penalties, remedies and/or sanctions, modifications to business practices and compliance programs and/or referral to other governmental agencies for other appropriate actions. It is not possible to accurately predict at this time when matters relating to the Staff of the Division of Enforcement and the SDNY investigations will be completed, the final outcome of the Staff of the Division of Enforcement and the SDNY investigations, what additional actions, if any, may be taken by the Staff of the Division of Enforcement, the SDNY or by other governmental agencies, or the effect that such actions may have on our business, prospects, operating results and financial condition, which could be material.

The Staff of the Division of Enforcement and the SDNY investigations, including any matters identified in the Internal Review, could also result in (1) third-party claims against the Company, which may include the assertion of claims for monetary damages, including but not limited to interest, fees, and expenses, (2) damage to the Company's business or reputation, (3) loss of, or adverse effect on, cash flow, assets, goodwill, results of operations, business, prospects, profits or business value, including the possibility of certain of the Company's existing contracts being cancelled, (4) adverse consequences on the

27

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Company's ability to obtain or continue financing for current or future projects and/or (5) claims by directors, officers, employees, affiliates, advisors, attorneys, agents, debt holders or other interest holders or constituents of the Company or its subsidiaries, any of which could have a material adverse effect on the Company's business, prospects, operating results and financial condition.

Further, to the extent that these investigations and any resulting third-party claims yield adverse results over time, such results could jeopardize the Company's operations and exhaust its cash reserves, and could cause stockholders to lose their entire investment.

The Company and the Staff of the Division of Enforcement have been engaged in discussions regarding a resolution to the Staff’s investigation. Based on the advancement of those discussions in October 2021, the Company reserved a $125 million loss as its best estimate of the contingency in accrued liabilities as of September 30, 2021, and in selling, general, and administrative expenses for the three and nine months ended September 30, 2021, on the consolidated financial statements. While any resolution cannot be finalized until voted upon by the full Commission, if approved, this resolution is expected to include a $125 million civil penalty paid over time and findings of violations by the Company of Section 10(b) and Rule 10b-5 of the Securities Exchange Act. The Company continues to cooperate with the Division of Enforcement to fully resolve the matter. There can be no assurance as to the timing or final terms of any resolution, and the Company may not be able to reach a resolution at all. Final resolution of this matter is subject to documentation satisfactory to all the parties, and completion of any settlement is contingent on a vote of the Commissioners of the SEC. The Company intends to seek reimbursement from Mr. Milton for costs and damages arising from the actions that are the subject of the government and regulatory investigations.

Shareholder Securities Litigation

Beginning on September 15, 2020, six putative class action lawsuits were filed against the Company and certain of its current and former officers and directors, asserting violations of federal securities laws under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, in one case, violations of the Unfair Competition Law under California law (the “Shareholder Securities Litigation”). The complaints generally allege that the Company and certain of its officers and directors made false and/or misleading statements in press releases and public filings regarding the Company's business plan and prospects. The actions are: Borteanu v. Nikola Corporation, et al. (Case No. 2:20-cv-01797-JZB), filed by Daniel Borteanu in the United States District Court of the District of Arizona on September 15, 2020; Salem v. Nikola Corporation, et al. (Case No. 1:20-cv-04354), filed by Arab Salem in the United States District Court for the Eastern District of New York on September 16, 2020; Wojichowski v. Nikola Corporation, et al. (Case No. 2:20-cv-01819-DLR), filed by John Wojichowski in the United States District Court for the District of Arizona on September 17, 2020; Malov. Nikola Corporation, et al. (Case No. 5:20-cv-02168), filed by Douglas Malo in the United States District Court for the Central District of California on October 16, 2020; and Holzmacher, et al. v. Nikola Corporation, et al. (Case No. 2:20-cv-2123-JJT), filed by Albert Holzmacher, Michael Wood and Tate Wood in the United States District Court for the District of Arizona on November 3, 2020, and Eves v. Nikola Corporation, et al. (Case No. 2:20-cv-02168-DLR), filed by William Eves in the United States District Court for the District of Arizona on November 10, 2020. In October 2020, stipulations by and among the parties to extend the time for the defendants to respond to the complaints until a lead plaintiff, lead counsel, and an operative complaint are identified were entered as orders in certain of the filed actions. On November 16, 2020 and December 8, 2020 respectively, orders in the Malo and Salem actions were entered to transfer the actions to the United States District Court for the District of Arizona.

On November 16, 2020, ten motions both to consolidate the pending securities actions and to be appointed as lead plaintiff were filed by putative class members. On December 15, 2020, the United States District Court for the District of Arizona consolidated the actions under lead case Borteanu v. Nikola Corporation, et al., No. CV-20-01797-PXL-SPL, and appointed Angelo Baio as the “Lead Plaintiff”. On December 23, 2020, a motion for reconsideration of the Court’s order appointing the Lead Plaintiff was filed. On December 30, 2020, a petition for writ of mandamus seeking to vacate the District Court’s Lead Plaintiff order and directing the court to appoint another Lead Plaintiff was filed before the United States Court of Appeals for the Ninth Circuit, Case No. 20-73819. The motion for reconsideration was denied on February 18, 2021. On July 23, 2021, the Ninth Circuit granted in part the mandamus petition, vacated the district court’s December 15, 2020 order, and remanded the case to the District Court to reevaluate the appointment of a Lead Plaintiff. On October 14, the District Court lifted the stay of the proceedings, set an expedited briefing schedule to address Plaintiff Baio’s Motion for an Evidentiary Hearing and ordered that the Court will issue an order naming a lead plaintiff pursuant to the Ninth Circuit’s July 23, 2021 Opinion in due course.

28

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Plaintiffs seek an unspecified amount in damages, attorneys’ fees, and other relief. The Company intends to vigorously defend itself. The Company is unable to estimate the potential loss or range of loss, if any, associated with these lawsuits, which could be material.

Derivative Litigation

Beginning on September 23, 2020, two purported shareholder derivative actions were filed in the United States District Court for the District of Delaware (Byun v. Milton, et al., Case No. 1:20-cv-01277-UNA; Salguocar v. Girsky et. al., Case No. 1:20-cv-01404-UNA), purportedly on behalf of the Company, against certain of the Company's current and former directors alleging breaches of fiduciary duties, violations of Section 14(a) of the Exchange Act, and gross mismanagement. The Byun action also brings claims for unjust enrichment and abuse of control, while the Salguocar action brings a claim for waste of corporate assets. On October 19, 2020, the Byun action was stayed until 30 days after the earlier of (a) the Shareholder Securities Litigation being dismissed in their entirety with prejudice; (b) defendants filing an answer to any complaint in the Shareholder Securities Litigation; or (c) a joint request by plaintiff and defendants to lift the stay. On November 17, 2020, the Byun and Salguocar actions were consolidated as In re Nikola Corporation Derivative Litigation, Lead Case No. 20-cv-01277-CFC. The consolidated action remains stayed.

On December 18, 2020, a purported shareholder derivative action was filed in the United States District Court for the District of Arizona, Huhn v. Milton et al., Case No. 2:20-cv-02437-DWL, purportedly on behalf of the Company, against certain of the Company’s current and former directors alleging breaches of fiduciary duties, violations of Section 14(a) of the Exchange Act, unjust enrichment, and against defendant Jeff Ubben, a member of the Company’s board of directors, insider selling and misappropriation of information. On January 26, 2021, the Huhn action was stayed until 30 days after the earlier of (a) the Shareholder Securities Litigation being dismissed in its entirety with prejudice; (b) defendants filing an answer to any complaint in the Shareholder Securities Litigation; or (c) a joint request by plaintiff and defendants to lift the stay.

The complaints seek unspecified monetary damages, costs and fees associated with bringing the actions, and reform of the Company's corporate governance, risk management and operating practices. The Company intends to vigorously defend against the foregoing complaints. The Company is unable to estimate the potential loss or range of loss, if any, associated with these lawsuits, which could be material.

In addition, on March 8, 2021, the Company received a demand letter from a law firm representing a purported stockholder of the Company alleging facts and claims substantially the same as many of the facts and claims in the filed derivative shareholder lawsuit. The demand letter requests that the board of directors (i) undertake an independent internal investigation into certain board members and management’s purported violations of Delaware and/or federal law; and (ii) commence a civil action against those members of the board and management for alleged fiduciary breaches. In April 2021, the board of directors formed a demand review committee, consisting of independent directors Bruce L. Smith, and Mary L. Petrovich, to review such demands and provide input to the Company. There can be no assurance as to whether any litigation will be commenced by or against the Company by the purported shareholder with respect to the claims set forth in the demand letter, or whether any such litigation could be material.

Books and Record Demands Pursuant to Delaware General Corporation Law Section 220

The Company has received a number of demand letters pursuant to Section 220 of the Delaware General Corporation Law (“DGCL”), seeking disclosure of certain of the Company’s records. The Company has responded to those demands, stating its belief that the demand letters fail to fully comply with the requirements of Section 220 of the DGCL. However, in the interest of resolution and while preserving all rights of the defendants, the Company has engaged in negotiations with the shareholders, and has provided certain information that the Company had reasonably available to it.

On January 15, 2021, Plaintiff Frances Gatto filed a complaint in Delaware Chancery Court seeking to compel inspection of books and records pursuant to Section 220 of the DGCL. On January 26, 2021, Plaintiff’s counsel and the Company filed a joint letter, notifying the Court that the parties are engaged in dialogue regarding Plaintiff’s demand, and the Company need not answer or otherwise respond to the complaint at this time. On October 20, 2021, Plaintiff dismissed the action without prejudice.

On October 8, 2021, Plaintiffs Zachary BeHage and Benjamin Rowe filed a complaint in Delaware Chancery Court seeking to compel inspection of books and records pursuant to Section 220 of the DGCL. On October 19, 2021, Plaintiffs’

29

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

counsel and the Company filed a joint letter, notifying the Court that the parties are engaged in dialogue regarding Plaintiffs’ demand, and the Company need not answer or otherwise respond to the complaint at this time.

AAA Arbitration Demand

On July 23, 2021, former Executive Chairman Trevor Milton filed an arbitration demand with the American Arbitration Association against the Company seeking indemnification and advancement of defense costs as well as cooperation in Mr. Milton’s defense in certain legal proceedings. The Company disputes Mr. Milton’s claims and will defend itself in arbitration.

Commitments and Contingencies

Coolidge Land Conveyance

In February 2019, the Company was conveyed 430 acres of land in Coolidge, Arizona, by PLH. The purpose of the land conveyance was to incentivize the Company to locate its manufacturing facility in Coolidge, Arizona, and provide additional jobs to the region. The Company fulfilled its requirement to commence construction within the period defined by the agreement and is required to complete construction of the manufacturing facility within five years of February 2019 (the “Manufacturing Facility Deadline”).

If the Company fails to meet the Manufacturing Facility Deadline, the Company may extend the completion deadline by paying PLH $0.2 million per month, until construction is completed (the "Monthly Payment Option"). The extension of the Manufacturing Facility Deadline beyond two years will require express written consent of PLH. If the Company does not exercise the Monthly Payment Option, fails to make timely payments on the Monthly Payment Option, or fails to complete construction by the extended Manufacturing Facility Deadline, PLH is entitled to either the $4.0 million security deposit or may reacquire the land and property at the appraised value to be determined by independent appraisers selected by the Company and PLH.

FCPM License

In the third quarter of 2021, the Company entered into a FCPM license to intellectual property that will be used to adapt, further develop and assemble FCPMs. Payments for the license will be due in installments ranging from 2022 to 2023. As of September 30, 2021, the Company accrued $11.6 million in accrued expenses and other current liabilities and $34.7 million in other long-term liabilities on the consolidated balance sheets.

13. NET LOSS PER SHARE

The following table sets forth the computation of the basic and diluted net loss per share for the three and nine months ended September 30, 2021 and 2020:

30

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Net loss attributable to common stockholders	$	(267,567)	$	(79,704)	$	(531,022)	$	(242,039)
Less: revaluation of warrant liability	(4,467)		(37,745)		(2,907)		(8,588)
Adjusted net loss	$	(272,034)	$	(117,449)	$	(533,929)	$	(250,627)
Denominator:
Weighted average shares outstanding, basic	400,219,585		377,660,477		395,691,795		318,315,891
Dilutive effect of common stock issuable from assumed exercise of warrants	11,084		626,201		169,081		660,556
Weighted average shares outstanding, diluted	400,230,669		378,286,678		395,860,876		318,976,447
Net loss per share:
Basic	$	(0.67)	$	(0.21)	$	(1.34)	$	(0.76)
Diluted	$	(0.68)	$	(0.31)	$	(1.35)	$	(0.79)

Basic net loss per share is computed by dividing net loss for the period by the weighted-average number of common shares outstanding during the period.

Diluted net loss per share is computed by dividing the net loss, adjusted for the revaluation of warrant liability for the private warrants, by the weighted average number of common shares outstanding for the period, adjusted for the dilutive effect of shares of common stock equivalents resulting from the assumed exercise of the warrants. The treasury stock method was used to calculate the potential dilutive effect of these common stock equivalents.

Potentially dilutive shares were excluded from the computation of diluted net loss when their effect was antidilutive. The following outstanding common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Stock options, including performance stock options	29,299,842	39,336,240	29,299,842	39,336,240
Restricted stock units, including market based RSUs	24,319,237	14,888,800	24,319,237	14,888,800
Total	53,619,079	54,225,040	53,619,079	54,225,040

14. SUBSEQUENT EVENTS

First Price Differential Settlement

In accordance with the Amended MIPA, the first price differential with the WVR Sellers was settled on October 12, 2021, for $3.4 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this report, the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” "will", and similar expressions are intended to identify forward looking statements. These are statements that relate to future periods and include our financial and business performance; expected timing with respect to the buildout of our manufacturing facilities, joint venture with Iveco and production and attributes of our BEV and FCEV trucks; expectations regarding our hydrogen fuel station rollout plan and hydrogen strategy; timing of completion of prototypes, validation testing, volume production and other milestones; securing components for our trucks on acceptable terms and in a timely manner, or at all; changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; planned collaboration with our business partners; our future capital requirements and sources and uses of cash; the potential outcome of investigations, litigation, complaints, product liability claims and/or adverse publicity, including any settlement with the SEC; the implementation, market acceptance and success of our business model; developments relating to our competitors and industry; the impact of health epidemics, including the COVID-19 pandemic, on our business and the actions we may take in response thereto; our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; our ability to obtain funding for our operations; the outcome of any known and unknown regulatory proceedings; our business, expansion plans and opportunities; changes in applicable laws or regulations; and anticipated trends and challenges in our business and the markets in which we operate.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expected. These risks and uncertainties include, but are not limited to, those risks discussed in Item 1A of this report, as well as our ability to execute our business model, including market acceptance of our planned products and services; changes in applicable laws or regulations; risks associated with the outcome of any legal, regulatory, or judicial proceeding; the effect of the COVID-19 pandemic on our business; our ability to raise capital; our ability to compete; the success of our business collaborations; regulatory developments in the United States and foreign countries; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and our history of operating losses. These forward-looking statements speak only as of the date hereof. We expressly disclaim any obligation or undertaking to update any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

In this report, all references to “Nikola,” “we,” “us,” or “our” mean Nikola Corporation.

Nikola™ is a trademark of Nikola Corporation. We also refer to trademarks of other corporations and organizations in this report.

The below discussion should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in our Annual Report on Form 10-K/A for the year ended December 31, 2020.

Overview

We are a technology innovator and integrator, working to develop innovative energy and transportation solutions. We are pioneering a business model that will enable corporate customers to integrate next-generation truck technology, hydrogen fueling infrastructure, and related maintenance. By creating this ecosystem, we and our strategic business partners and suppliers hope to build a long-term competitive advantage for clean technology vehicles and next generation fueling solutions.

Our expertise lies in design, innovation, and software and engineering. We assemble, integrate, and commission our vehicles in collaboration with our business partners and suppliers. Our approach includes leveraging strategic partnerships to help lower cost, increase capital efficiency and increase speed to market.

We operate in two business units: Truck and Energy. The Truck business unit is developing and commercializing BEV and FCEV Class 8 trucks that provide environmentally friendly, cost effective solutions to the short, medium and long haul trucking sector. The Energy business unit is primarily developing a hydrogen fueling ecosystem and charging stations to support our BEV and FCEV customers.

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Our planned hydrogen fueling ecosystem is expected to include hydrogen production and/or hydrogen procurement, hydrogen distribution, and hydrogen storage and dispensing. As part of our hydrogen strategy, on June 22, 2021, we entered into a purchase agreement ("Offtake Agreement") with Wabash Valley Resources LLC (“WVR”), pursuant to which WVR agreed to sell to us, and we agreed to purchase from WVR, hydrogen to be produced from the hydrogen production facility being developed by WVR in West Terre Haute, Indiana (the "Plant"), once completed.

During 2020, we established a joint venture with Iveco, a subsidiary of CNHI, Nikola Iveco Europe GmbH. Our joint venture with Iveco provides us with the manufacturing infrastructure to build BEV trucks for the North American market in addition to that of our greenfield manufacturing facility in Coolidge, Arizona. The operations of the joint venture commenced during the fourth quarter of 2020. During the second quarter of 2021, the joint venture completed the construction of the manufacturing facility and started trial production for the Nikola Tre BEV on the assembly line in Ulm, Germany.

We expect both our capital and operating expenditures will increase significantly in connection with our ongoing activities, as we:

•    construct manufacturing facilities and purchase related equipment;

•    commercialize our heavy-duty trucks and other products;

•    develop hydrogen fueling stations;

•    continue to invest in our technology;

•    increase our investment in marketing and advertising, sales, and distribution infrastructure for our products and services;

•    maintain and improve our operational, financial and management information systems;

•    hire additional personnel;

•    obtain, maintain, expand, and protect our intellectual property portfolio; and

•    operate as a public company.

Recent Developments

•We have completed assembly of eight Tre BEV Gamma trucks and have started pre-series truck production in October 2021. Pre-series trucks are expected to begin testing for high mileage accumulation by the end of 2021.

•We have completed the assembly of our Tre FCEV Alpha trucks and expect to begin road trials by the end of 2021.

•We have completed construction of Phase 0.5 at our Coolidge manufacturing facility. We continue to assemble pre-series trucks and concurrently are expanding our Phase 1 area to enable production capacity of 2,400 trucks in 2022. Phase 1 is expected to be completed in the first quarter of 2022.

•The operation of the Iveco manufacturing plant in Ulm, Germany was inaugurated in September 2021 and once completed, the plant is expected to have a production capacity of 2,000 trucks per year.

•We continued to expand our sales and service network with the additions of network partners with coverage in the Northeast United States and throughout Central and Southern California.

•We entered into a Second Purchase Agreement with Tumim Stone Capital LLC ("Tumim") that will allow us, at our sole discretion, to sell up to an additional $300 million of shares of our common stock to Tumim.

•We entered into a memorandum of understanding with OPAL Fuels LLC on the development, construction, and operation of hydrogen refueling stations in North America and the use of renewable natural gas in hydrogen production.

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•We signed a joint development agreement with TC Energy for co-development of large-scale production hubs. A key objective of the collaboration is to establish hubs near highly traveled truck corridors to serve our planned need for hydrogen to fuel our FCEVs within the next five years.

•On October 20, 2021, we entered into a long term supply agreement with LG Energy Solution, LTD. This supply agreement will provide additional battery cells for our trucks beginning in 2022 through 2029.

•The Company and the Staff of the Division of Enforcement have been engaged in discussions regarding a resolution to the Staff’s investigation. Based on the advancement of those discussions in October 2021, the Company reserved a $125 million loss as its best estimate of the contingency in accrued liabilities as of September 30, 2021, and in selling, general, and administrative expenses for the three and nine months ended September 30, 2021, on the consolidated financial statements. While any resolution cannot be finalized until voted upon by the full Commission, if approved, this resolution is expected to include a $125 million civil penalty paid over time and findings of violations by the Company of Section 10(b) and Rule 10b-5 of the Securities Exchange Act. The Company continues to cooperate with the Division of Enforcement to fully resolve the matter. There can be no assurance as to the timing or final terms of any resolution, and the Company may not be able to reach a resolution at all. Final resolution of this matter is subject to documentation satisfactory to all the parties, and completion of any settlement is contingent on a vote of the Commissioners of the SEC. The Company intends to seek reimbursement from Mr. Milton for costs and damages arising from the actions that are the subject of the government and regulatory investigations.

Comparability of Financial Information

Our results of operations and statements of assets and liabilities may not be comparable between periods as a result of the Business Combination and becoming a public company. As a consequence of the Business Combination, we became a Nasdaq-listed company, which has and will continue to require us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to continue to incur additional annual expenses as a public company for, among other things, directors' and officers' liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit, compliance, and legal fees.

Key Factors Affecting Operating Results

We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section titled “Risk Factors.”

Commercial launch of heavy duty trucks and other products

While we expect pre-series Tre BEV trucks to be completed late in the fourth quarter of 2021 and begin accumulating mileage on public roads with customers, we do not expect to derive revenue from our Tre BEV trucks until 2022. We expect to derive revenue from our Tre FCEV trucks in the second half of 2023. Before commercialization or start-of-production, we must complete modification or construction of required manufacturing facilities, purchase and integrate related systems, components, and software, and achieve validation and testing milestones. Presently, we are experiencing supply chain shortages, including but not limited to battery cells, integrated circuits, vehicle control chips, and displays. Certain production ready components such as chipsets and displays may not arrive at our facilities until the first quarter of 2022, which has and may continue to cause delays in validation and testing for these components. This would mean a delay in the availability of saleable Tre BEV trucks.

We also require substantial additional capital to develop our products and services and fund operations for the foreseeable future. Until we can generate sufficient revenue, we expect to finance our operations through a combination of existing cash on hand, follow-on public offerings, private placements, debt financings, strategic partnerships, and licensing arrangements. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development efforts. We expect that any delays in the successful completion of our manufacturing facility, delays in critical parts availability, and in validation and testing will impact our ability to generate revenue.

Customer Demand

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While not yet commercially available, we have received significant interest in our trucks from potential customers. Going forward, we expect contractual orders from customers to be an important indicator of our future performance.

Basis of Presentation

Currently, we conduct business through one reportable and one operating segment. See Note 2 in our Annual Report on Form 10-K/A for the year ended December 31, 2020 for more information.

Components of Results of Operations

Revenues

Prior to 2021, we primarily generated revenue from services related to solar installation projects that were completed in one year or less. Solar installation projects are not a part of our primary operations and were concluded in 2020.

Following the anticipated introduction of our products to the market, we expect the significant majority of our revenue to be derived from our BEV trucks starting in 2022 and from bundled leases, or other alternative structures, for our FCEV trucks beginning in 2023. We intend for our bundled lease offering to be inclusive of the cost of the truck, hydrogen fuel and regularly scheduled maintenance.

Cost of Revenues

Prior to 2021, our cost of revenue included materials, labor, and other direct costs related to solar installation projects.

Once we have reached commercial production, cost of revenue will include direct parts, material and labor costs, manufacturing overhead, including amortized tooling costs and depreciation of our greenfield manufacturing facility, depreciation of our hydrogen fueling stations, cost of hydrogen production, shipping and logistics costs and reserves for estimated warranty expenses.

Research and Development Expense

Research and development expenses consist primarily of costs incurred for the discovery and development of our vehicles, which include:

•    Fees paid to third parties such as consultants and contractors for outside development;

•    Expenses related to materials, supplies and third-party services, including prototype tooling and non-recurring engineering;

•    Personnel related expenses, including salaries, benefits, and stock-based compensation expense, for personnel in our engineering and research functions;

•    Depreciation for prototyping equipment and R&D facilities; and

•Expenses related to operating the Coolidge manufacturing facility until the start of commercial production.

During the three and nine months ended September 30, 2021, our research and development expenses have primarily been incurred in the development of our BEV and FCEV trucks.

As a part of its in-kind investment, Iveco agreed to provide us with $100.0 million in advisory services (based on pre-negotiated hourly rates), including project coordination, drawings, documentation support, engineering support, vehicle integration, and product validation support. During the three and nine months ended September 30, 2021, we utilized $12.5 million and $40.2 million, respectively, of advisory services which were recorded as research and development expense. As of September 30, 2021, we have $6.0 million of prepaid in-kind advisory services remaining which is expected to be consumed during the remainder of 2021 and will be recorded as research and development expense until we reach commercial production.

We expect our research and development costs to increase for the foreseeable future as we continue to invest to achieve our technology and product roadmap goals.

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Selling, General, and Administrative Expense

Selling, general, and administrative expenses consist of personnel related expenses for our corporate, executive, finance, and other administrative functions, expenses for outside professional services, including legal, audit and accounting services, as well as expenses for facilities, depreciation, amortization, travel, and marketing costs. Personnel related expenses consist of salaries, benefits, and stock-based compensation.

We expect our selling, general, and administrative expenses to increase for the foreseeable future as we scale headcount with the growth of our business, and as a result of operating as a public company.

Interest Income (Expense), net

Interest income consists primarily of interest received or earned on our cash and cash equivalents balances. Interest expense consists of interest on our finance lease liability and term loan.

Loss on Forward Contract Liability

The loss on forward contract liability includes losses from the remeasurement of the Series D redeemable convertible preferred stock forward contract liability. In April 2020, we fulfilled the forward contract liability and, therefore, subsequent to June 30, 2020, there is no impact from the remeasurement of the forward contract liability.

Revaluation of Warrant Liability

The revaluation of warrant liability includes net gains and losses from the remeasurement of the warrant liability. Warrants recorded as liabilities are recorded at their fair value and remeasured at each reporting period.

Other Income (Expense), net

Other income (expense), net consists primarily of other miscellaneous non-operating items, such as government grants, subsidies, merchandising, revaluation gains and losses on the derivative liability, foreign currency gains and losses, and unrealized gains and losses on investments.

Income Tax Expense

Our income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Due to cumulative losses, we maintain a valuation allowance against our U.S. and state deferred tax assets.

Equity in Net Loss of Affiliates

Equity in net loss of affiliates consists of our portion of losses from equity method investments.

Results of Operations

Comparison of Three Months Ended September 30, 2021 to Three Months Ended September 30, 2020

The following table sets forth our historical operating results for the periods indicated:

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	Three Months Ended September 30,				$		%
	2021		2020		Change		Change
	(dollar amounts in thousands)
Operating expenses:
Research and development	$	78,896	$	51,496	$	27,400	53.2%
Selling, general, and administrative	192,929		65,782		127,147		193.3%
Total operating expenses	271,825		117,278		154,547		131.8%
Loss from operations	(271,825)		(117,278)		(154,547)		131.8%
Other income (expense):
Interest income (expense), net	(118)		171		(289)		NM
Revaluation of warrant liability	4,467		37,745		(33,278)		(88.2)%
Other income (expense), net	1,057		(340)		1,397		NM
Loss before income taxes and equity in net loss of affiliates	(266,419)		(79,702)		(186,717)		234.3%
Income tax expense	1		2		(1)		NM
Loss before equity in net loss of affiliates	(266,420)		(79,704)		(186,716)		234.3%
Equity in net loss of affiliates	(1,147)		—		(1,147)		NM
Net loss	$	(267,567)	$	(79,704)	$	(187,863)	235.7%
Net loss per share:
Basic	$	(0.67)	$	(0.21)	$	(0.46)	NM
Diluted	$	(0.68)	$	(0.31)	$	(0.37)	NM
Weighted-average shares outstanding:
Basic	400,219,585		377,660,477		22,559,108		NM
Diluted	400,230,669		378,286,678		21,943,991		NM

Research and Development

Research and development expenses increased by $27.4 million, or 53.2%, from $51.5 million during the three months ended September 30, 2020 to $78.9 million during the three months ended September 30, 2021. This increase was primarily due to $12.7 million in higher spend on purchased components and tooling as we focus on the development, building, and testing and validation of our Tre BEV truck, as well as continuing the development of our FCEV truck platform.In addition, personnel costs increased $9.4 million, freight related to the transportation of prototype parts and components increased $3.2 million, and stock-based compensation expense increased $1.9 million, driven by growth in our in-house engineering headcount. The remaining increase was driven by depreciation and occupancy costs related to capital equipment and software dedicated to research and development activities, and an increase in travel due to easing of travel restrictions imposed during the prior year related to COVID-19, partially offset by a decrease in outside development spend.

Selling, General, and Administrative

Selling, general, and administrative expenses increased by $127.1 million, or 193.3%, from $65.8 million during the three months ended September 30, 2020 to $192.9 million during the three months ended September 30, 2021. The increase was primarily related to a $125 million loss contingency regarding a potential resolution to the SEC investigation. Additionally, there was an increase in legal expenses of $4.4 million, an increase in personnel expenses of $3.5 million driven by growth in headcount, an increase of $2.9 million for the non-cash commitment share issuance costs related to the second equity line of credit with Tumim, and higher general corporate expenses, including IT equipment and depreciation of our headquarters. These increases were partially offset by a decrease of $3.0 million for professional services due to registration filing fees and other general corporate expenses in the prior year and a decrease of $5.1 million in stock compensation driven by the modification of the former Executive Chairman's stock awards recognized in the prior year.

Interest Income (Expense), net

Interest income (expense), net was immaterial for the three months ended September 30, 2021 and 2020.

Revaluation of Warrant Liability

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The revaluation of warrant liability decreased $33.3 million, from $37.7 million during the three months ended September 30, 2020 to $4.5 million during the three months ended September 30, 2021, resulting from changes in fair value of our warrant liability.

Other Income (Expense), net

Other income (expense), net increased by $1.4 million from $0.3 million net expense during the three months ended September 30, 2020 to $1.1 million net income during the three months ended September 30, 2021. The increase is primarily related to gains from foreign currency translation and a gain from the revaluation of the derivative liability.

Income Tax Expense

Income tax expense was immaterial for the three months ended September 30, 2021 and 2020. We have accumulated net operating losses at the federal and state level and maintain a full valuation allowance against our net deferred taxes.

Equity in Net Loss of Affiliates

Equity in net loss of affiliates for the quarter ended September 30, 2021, was $1.1 million which relates to the net loss of our joint venture with Iveco and our equity investment in WVR.

Comparison of Nine Months Ended September 30, 2021 to Nine Months Ended September 30, 2020

The following table sets forth our historical operating results for the periods indicated:

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	Nine Months Ended September 30,				$		%
	2021		2020		Change		Change
	(dollar amounts in thousands)
Solar revenues	$	—	$	94	$	(94)	NM
Cost of solar revenues	—		73		(73)		NM
Gross profit	—		21		(21)		NM
Operating expenses:
Research and development	201,785		118,098		83,687		70.9%
Selling, general, and administrative	329,028		117,821		211,207		179.3%
Total operating expenses	530,813		235,919		294,894		125.0%
Loss from operations	(530,813)		(235,898)		(294,915)		125.0%
Other income (expense):
Interest income (expense), net	(219)		255		(474)		NM
Loss on forward contract liability	—		(1,324)		1,324		NM
Revaluation of warrant liability	2,907		8,588		(5,681)		(66.2)%
Other income (expense), net	174		(249)		423		NM
Loss before income taxes and equity in net loss of affiliate	(527,951)		(228,628)		(299,323)		130.9%
Income tax expense	4		4		—		NM
Loss before equity in net loss of affiliate	(527,955)		(228,632)		(299,323)		130.9%
Equity in net loss of affiliate	(3,067)		—		(3,067)		NM
Net loss	(531,022)		(228,632)		(302,390)		132.3%
Premium paid on repurchase of redeemable convertible preferred stock	—		(13,407)		13,407		(100.0)%
Net loss attributable to common stockholders	$	(531,022)	$	(242,039)	$	(288,983)	119.4%
Net loss per share attributable to common stockholders:
Basic	$	(1.34)	$	(0.76)	$	(0.58)	NM
Diluted	$	(1.35)	$	(0.79)	$	(0.56)	NM
Weighted-average shares outstanding:
Basic	395,691,795		318,315,891		77,375,904		NM
Diluted	395,860,876		318,976,447		76,884,429		NM

Solar Revenues and Cost of Solar Revenues

Solar revenues and cost of solar revenues for the nine months ended September 30, 2020 were related to solar installation service projects. Solar installation projects were legacy projects that were not related to our primary operations and were concluded in 2020.

Research and Development

Research and development expenses increased by $83.7 million, or 70.9%, from $118.1 million during the nine months ended September 30, 2020 to $201.8 million during the nine months ended September 30, 2021. This increase was primarily due to $31.0 million in higher spend on purchased components, outside engineering services, and tooling as we focus on the development, building, and testing and validation of our Tre BEV truck, as well as continuing the development of our FCEV truck platform. In addition, personnel costs increased $23.2 million and stock-based compensation increased $19.2 million, driven by growth in our in-house engineering headcount. We also incurred $4.3 million in higher freight costs related to the transportation of prototype parts and components. The remaining increase was driven by higher depreciation and occupancy costs related to equipment and software dedicated to research and development activities, as well as an increase in travel due to easing of travel restrictions imposed during the prior year related to COVID-19.

Selling, General, and Administrative

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Selling, general, and administrative expenses increased by $211.2 million, or 179.3%, from $117.8 million during the nine months ended September 30, 2020 to $329.0 million during the nine months ended September 30, 2021. The increase was primarily related to a $125 million loss contingency regarding a potential resolution to the SEC investigation. Additionally, we incurred higher stock-based compensation expense of $41.0 million and higher legal expenses of $30.6 million primarily related to regulatory and legal matters incurred in connection with the Hindenburg article. Further, there was an increase of $10.1 million in personnel expenses driven by growth in headcount and an increase of $5.6 million related to the non-cash commitment share issuance costs related to the equity line of credit with Tumim.

Interest Income (Expense), net

Interest income (expense), net was immaterial for the nine months ended September 30, 2021 and 2020.

Loss on Forward Contract Liability

Loss on the forward contract liability represents loss recognized from a $1.3 million change in fair value of the forward contract liability as of September 30, 2020. The forward contract was settled in April 2020.

Revaluation of Warrant Liability

The revaluation of warrant liability decreased $5.7 million, from $8.6 million during the nine months ended September 30, 2020 to $2.9 million during the nine months ended September 30, 2021 resulting from changes in fair value of our warrant liability.

Other Income (Expense), net

Other income (expense), net was immaterial for the nine months ended September 30, 2021 and 2020.

Income Tax Expense

Income tax expense was immaterial for the nine months ended September 30, 2021 and 2020. We have accumulated net operating losses at the federal and state level and maintain a full valuation allowance against our net deferred taxes.

Equity in Net Loss of Affiliates

Equity in net loss of affiliates for the nine months ended September 30, 2021, was a $3.1 million loss which relates to the net loss of our joint venture with Iveco and our equity investment in WVR.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating operational performance. We use the following non-GAAP financial information to evaluate ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing operating performance.

EBITDA and Adjusted EBITDA

“EBITDA” is defined as net loss before interest income or expense, income tax expense or benefit, and depreciation and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for stock-based compensation and other items determined by management. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating EBITDA and Adjusted EBITDA we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA in the same fashion.

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Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.

The following table reconciles net loss to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)
Net loss	$	(267,567)	$	(79,704)	$	(531,022)	$	(228,632)
Interest (income) expense, net	118		(171)		219		(255)
Income tax expense	1		2		4		4
Depreciation and amortization	2,249		1,498		5,959		4,424
EBITDA	(265,199)		(78,375)		(524,840)		(224,459)
Stock-based compensation	49,047		52,196		151,983		91,736
Loss on forward contract liability	—		—		—		1,324
Revaluation of warrant liability	(4,467)		(37,745)		(2,907)		(8,588)
Revaluation of derivative liability	(319)		—		(319)		—
Equity in net loss of affiliates	1,147		—		3,067		—
Regulatory and legal matters (1)	9,771		5,173		35,657		5,173
Legal loss contingency(2)	125,000		—		125,000		—
Adjusted EBITDA	$	(85,020)	$	(58,751)	$	(212,359)	$	(134,814)

(1) Regulatory and legal matters include legal, advisory, and other professional service fees incurred in connection with the Hindenburg article from September 2020, and investigations and litigation related thereto.

(2) Reserved loss contingency from discussions with the Staff of the Division of Enforcement regarding a potential resolution to the SEC investigation.

Non-GAAP Net Loss and Non-GAAP Net Loss Per Share, Basic and Diluted

Non-GAAP net loss and non-GAAP net loss per share, basic and diluted are presented as supplemental measures of our performance. Non-GAAP net loss is defined as net loss attributable to common stockholders, basic and diluted adjusted for stock compensation expense and other items determined by management. Non-GAAP net loss per share, basic and diluted, is defined as non-GAAP net loss divided by weighted average shares outstanding, basic and diluted.

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands, except share and per share data)
Net loss attributable to common stockholders	$	(267,567)	$	(79,704)	$	(531,022)	$	(242,039)
Stock-based compensation	49,047		52,196		151,983		91,736
Premium paid on repurchase of redeemable convertible preferred stock	—		—		—		13,407
Revaluation of warrant liability	(4,467)		(37,745)		(2,907)		(8,588)
Revaluation of derivative liability	(319)		—		(319)		—
Regulatory and legal matters(1)	9,771		5,173		35,657		5,173
Legal loss contingency(2)	125,000		—		125,000		—
Non-GAAP net loss	$	(88,535)	$	(60,080)	$	(221,608)	$	(140,311)
Non-GAAP net loss per share:
Basic	$	(0.22)	$	(0.16)	$	(0.56)	$	(0.44)
Diluted	$	(0.22)	$	(0.16)	$	(0.56)	$	(0.44)
Weighted average shares outstanding:
Basic	400,219,585		377,660,477		395,691,795		318,315,891
Diluted	400,230,669		378,286,678		395,860,876		318,976,447

(1) Regulatory and legal matters include legal, advisory, and other professional service fees incurred in connection with the Hindenburg article from September 2020, and investigations and litigation related thereto.

(2) Reserved loss contingency from discussions with the Staff of the Division of Enforcement regarding a potential resolution to the SEC investigation.

Liquidity and Capital Resources

Since inception, we financed our operations primarily from the sales of redeemable convertible preferred stock and common stock, the Business Combination, proceeds from the Stock Purchase Agreement, and redemption of warrants. As of September 30, 2021, our principal sources of liquidity were our cash and cash equivalents in the amount of $587.0 million, which are primarily invested in money market funds.

Short-Term Liquidity Requirements

As of the date of this Quarterly Report on Form 10-Q, we have yet to generate revenue from our core business operations. As of September 30, 2021, our current assets were $610.0 million consisting primarily of cash and cash equivalents of $587.0 million, and our current liabilities were $253.1 million primarily comprised of accrued expenses and accounts payables. During the second quarter of 2021, we entered into a Purchase Agreement with Tumim allowing us to issue shares of our common stock to Tumim for proceeds of up to $300 million. As of September 30, 2021 we have issued 6,270,740 shares of common stock to Tumim under the terms of the Purchase Agreement for gross proceeds of $72.9 million, excluding the 155,703 commitment shares issued to Tumim as consideration for its irrevocable commitment to purchase shares of our common stock under the Purchase Agreement. As of September 30, 2021, the remaining commitment available under the Purchase Agreement is $227.1 million.

During the third quarter of 2021, we entered into a Second Purchase Agreement with Tumim allowing us to issue shares of our common stock to Tumim for proceeds of up to an additional $300 million, provided that certain conditions have been met. These conditions include effectiveness of a registration statement covering the resale of shares of common stock that have been and may be issued under the Second Purchase Agreement and termination of the Purchase Agreement. As of September 30, 2021, we have not sold any shares of common stock to Tumim under the terms of the Second Purchase Agreement and have a remaining commitment of $300 million available.

We believe our cash and cash equivalents will be sufficient to continue to execute our business strategy over the next twelve month period by (i) completing the development and industrialization of the BEV truck, (ii) completing phase one

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construction of our greenfield manufacturing facility, (iii) completing the construction of a pilot commercial hydrogen station and (iv) hiring of personnel.

However, actual results could vary materially and negatively as a result of a number of factors, including:

•the costs of our greenfield manufacturing facility construction and equipment;

•the timing and the costs involved in bringing our vehicles to market, mainly the BEV truck;

•our ability to manage the costs of manufacturing the BEV trucks;

•the scope, progress, results, costs, timing and outcomes of our research and development for our FCEV trucks;

•the costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities;

•revenue received from sales of our BEV trucks;

•the costs of additional general and administrative personnel, including accounting and finance, legal and human resources, as well as costs related to litigation, investigations, or settlements;

•our ability to collect revenue; and

•other risks discussed in the section entitled "Risk Factors."

Long-Term Liquidity Requirements

Until we can generate sufficient revenue from truck sales and leases to cover operating expenses, working capital and capital expenditures, we expect to fund cash needs through a combination of equity and debt financing, including lease securitization, strategic collaborations, and licensing arrangements. If we raise funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of our common stock. If we raise funds by issuing debt securities, these debt securities may have rights, preferences and privileges senior to those of holders of our common stock. The terms of debt securities or borrowings could impose significant restrictions on our operations. If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or products, or grant licenses on terms that are not favorable to us. The credit market and financial services industry have in the past, and may in the future, experience periods of upheaval that could impact the availability and cost of equity and debt financing.

While we intend to raise additional capital in the future, if adequate funds are not available, we will need to curb our expansion plans or limit our research and development activities, which would have a material adverse impact on our business prospects and results of operations.

The following table provides a summary of cash flow data:

	Nine Months Ended September 30,
	2021		2020
	(in thousands)
Net cash used in operating activities	$	(195,369)	$	(84,598)
Net cash used in investing activities	(138,480)		(15,195)
Net cash provided by financing activities	71,557		932,443

Cash Flows from Operating Activities

Our cash flows from operating activities are significantly affected by the growth of our business primarily related to research and development activities. Our operating cash flows are also affected by our working capital needs to support growth in personnel related expenditures and fluctuations in accounts payable and other current assets and liabilities.

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Net cash used in operating activities was $195.4 million for the nine months ended September 30, 2021. The most significant component of our cash used during this period was net loss of $531.0 million, which included non-cash expenses of $152.0 million related to stock-based compensation, $40.2 million expense for in-kind services, other non-cash charges of $12.4 million and net cash inflows of $131.1 million from changes in operating assets and liabilities primarily driven an increase in accounts payable and accrued expenses.

Net cash used in operating activities was $84.6 million for the nine months ended September 30, 2020. The largest component of our cash used during this period was a net loss of $228.6 million, which included non-cash charges of $91.7 million related to stock-based compensation, $28.6 million expense for in-kind services, $8.6 million gain for the revaluation of warrant liability, other non-cash charges of $5.8 million, and net cash inflows of $26.5 million from changes in operating assets and liabilities primarily driven by an increase in accounts payable and accrued expenses and customer deposits.

Cash Flows from Investing Activities

We continue to experience negative cash flows from investing activities as we expand our business and build out infrastructure. Cash flows from investing activities primarily relate to capital expenditures to support our growth. Net cash used in investing activities is expected to continue to increase substantially as we build out and tool our manufacturing facility in Coolidge, Arizona, finance operations of our joint venture in Ulm, Germany, and develop the network of hydrogen fueling stations. As of September 30, 2021, we anticipate our capital expenditures for the remainder of fiscal year 2021 to be between $75 million to $85 million, of which a significant portion is related to the construction of our truck manufacturing facility and purchases of related equipment in Coolidge, Arizona.

Net cash used in investing activities was $138.5 million for the nine months ended September 30, 2021, which was primarily due to $113.7 million in costs of construction for our Coolidge manufacturing facility and purchases of and deposits for capital equipment and supplier tooling and our $25.0 million cash investment in WVR.

Net cash used in investing activities was $15.2 million for the nine months ended September 30, 2020, which was primarily due to purchases and deposits on capital equipment related to the construction of our headquarters.

Cash Flows from Financing Activities

Through September 30, 2021, we have financed our operations through proceeds from sales of redeemable convertible preferred stock and common stock, the Business Combination, and redemption of warrants.

Net cash provided by financing activities was $71.6 million for the nine months ended September 30, 2021, which was primarily due to proceeds from the Tumim Purchase Agreement of approximately $72.9 million, proceeds from the exercises of stock options of $4.2 million, partially offset by a $4.1 million payment of our term loan and other finance payments of $1.4 million.

Net cash provided by financing activities was $932.4 million for the nine months ended September 30, 2020, which was primarily due to net proceeds of $616.7 million from the Business Combination and the PIPE, proceeds from exercise of common stock warrants of $263.1 million, proceeds from the issuance of Series D redeemable convertible preferred stock of $50.3 million, net of issuance costs, proceeds from the exercises of stock options of $2.2 million and proceeds from tenant allowances for the construction of our headquarters of $0.9 million, offset by payments on our finance lease of $0.8 million.

Contractual Obligations and Commitments

During the third quarter of 2021, we entered into a FCPM license, payable in 2022 and 2023 and as of September 30, 2021, the Company accrued $11.6 million in accrued expenses and other current liabilities and $34.7 million in other long-term liabilities on the consolidated balance sheets. For the three and nine months ended September 30, 2021, there have been no other material changes to our significant contractual obligations as previously disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2020.

Off Balance Sheet Arrangements

Since the date of our incorporation, we have not engaged in any off balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission (the "SEC").

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Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. These principles require us to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. Our most significant estimates and judgments involve valuation of our stock-based compensation, including the fair value of common stock, the valuation of warrant liabilities, the valuation of the redeemable convertible preferred stock tranche liability, estimates related to our lease assumptions, and contingent liabilities, including litigation reserves. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.

There have been no substantial changes to these estimates, or the policies related to them during the three and nine months ended September 30, 2021. For a full discussion of these estimates and policies, see "Critical Accounting Estimates" in Item 7 of our Annual Report on Form 10-K/A for the year ended December 31, 2020.

Recent Accounting Pronouncements

See Note 2 to our Unaudited Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a variety of market and other risks, including the effects of changes in interest rates, inflation, and foreign currency exchange rates, as well as risks to the availability of funding sources, hazard events, and specific asset risks.

Interest Rate Risk

The market risk inherent in our financial instruments and our financial position represents the potential loss arising from adverse changes in interest rates. As of September 30, 2021 and December 31, 2020, we had cash and cash equivalents of $587.0 million and $840.9 million, respectively, consisting of interest-bearing money market accounts for which the fair market value would be affected by changes in the general level of U.S. interest rates. However, due to the short-term maturities and the low-risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our cash and cash equivalents.

Foreign Currency Risk

For the three months ended September 30, 2021 and 2020, we recorded a $0.7 million gain and a $0.2 million loss, respectively, for foreign currency translation. For the nine months ended September 30, 2021 and 2020, we recorded a $0.6 million gain and a $0.3 million loss, respectively, for foreign currency translation.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures under the Exchange Act as of September 30, 2021, the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Description and Remediation of Material Weakness as of March 31, 2021

On April 12, 2021, the staff of the SEC issued an SEC Staff Statement (“the SEC Staff Statement”) in which they clarified their interpretations of certain generally accepted accounting principles related to warrants issued by Special Purpose Acquisition Companies (“SPACs”). Prior to the SEC Staff Statement, we believed that our warrant accounting was consistent with generally accepted accounting principles. Our belief was supported by the fact that most other SPACs and parties who had merged with SPACs similarly interpreted the warrant accounting principles at issue. However, based on the clarifications expressed in the SEC Staff Statement, it resulted in a restatement as discussed in our Annual Report on Form 10-K/A for the year ended December 31, 2020 and a previously reported material weakness in our disclosure controls and procedures.

In connection with correcting our accounting for the private warrants assumed by us as part of the Business Combination, we have implemented additional review procedures, additional training and enhancements to the accounting policy related to the accounting for equity and liability instruments (including those with warrants) to determine proper accounting in accordance with GAAP (e.g., determine whether liability or equity classification and measurement is appropriate).

After completion of the items noted above, our management believes the previously identified material weakness has been remediated, subject to testing of the operating effectiveness of the control throughout the year.

Changes in Internal Control over Financial Reporting

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Other than the material weakness remediation activities described above, there were no changes in our internal control over financial reporting, as identified in connection with the evaluation required by Rule 13a-15(d) and Rule 15d-15(d) of the Exchange Act, that occurred during the three months ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see Note 12, Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and to Note 14 to our audited consolidated financial statements in our Annual Report on Form 10-K/A for the year ended December 31, 2020, which are incorporated by reference herein.

ITEM 1A. RISK FACTORS

Risks Related to OurBusiness and Industry

We are an early stage company with a history of losses, and expect to incur significant expenses and continuing losses for the foreseeable future.

We incurred net losses of $370.9 million and $531.0 million for the year ended December 31, 2020 and for the nine months ended September 30, 2021, respectively, and have incurred net losses of approximately $1.1 billion from Legacy Nikola's inception through September 30, 2021. We believe that we will continue to incur operating and net losses each quarter until at least the time we begin significant deliveries of our trucks, which is not expected to begin at least until 2022 for our battery electric vehicle, or BEV, truck and the second half of 2023 and 2024 for our Tre hydrogen fuel cell electric vehicle, or FCEV, truck and Two FCEV truck, respectively, and may occur later. Even if we are able to successfully develop and sell or lease our trucks, there can be no assurance that they will be commercially successful. Our potential profitability is dependent upon the successful development and successful commercial introduction and acceptance of our trucks and our hydrogen station platform, which may not occur.

We expect the rate at which we will incur losses to be significantly high in future periods as we:

•design, develop and manufacture our trucks;

•construct and equip our manufacturing plant to produce our trucks in Arizona;

•modify and equip the Iveco manufacturing plant in Germany to produce our trucks in Europe;

•build up inventories of parts and components for our trucks;

•manufacture an available inventory of our trucks;

•develop and deploy our hydrogen fueling stations;

•expand our design, development, maintenance and repair capabilities;

•increase our sales and marketing activities and develop our distribution infrastructure; and

•increase our general and administrative functions to support our growing operations.

Because we will incur the costs and expenses from these efforts before we receive any incremental revenue with respect thereto, our losses in future periods will be significant. In addition, we may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenue, which would further increase our losses.

We may be unable to adequately control the costs associated with our operations.

We will require significant capital to develop and grow our business, including developing and manufacturing our trucks, building our manufacturing plant and building our brand. We expect to continue to incur significant expenses which will impact our profitability, including research and development expenses, raw material procurement costs, leases, licenses, and

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sales and distribution expenses as we build our brand and market our trucks and bundled leasing model, and general and administrative expenses as we scale our operations. In addition, we may incur significant costs in connection with our services, including building our hydrogen fueling stations and honoring our maintenance commitments under our bundled lease package. Our ability to become profitable in the future will not only depend on our ability to successfully market our vehicles and other products and services, but also to control our costs. If we are unable to cost efficiently design, manufacture, market, sell, distribute and service our trucks and services, our margins, profitability and prospects would be materially and adversely affected.

Our business model has yet to be tested and any failure to commercialize our strategic plans would have an adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources.

Investors should be aware of the difficulties normally encountered by a new enterprise, many of which are beyond our control, including substantial risks and expenses in the course of establishing or entering new markets, organizing operations and undertaking marketing activities. The likelihood of our success must be considered in light of these risks, expenses, complications, delays and the competitive environment in which we operate. There is, therefore, nothing at this time upon which to base an assumption that our business plan will prove successful, and we may not be able to generate significant revenue, raise additional capital or operate profitably. We will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including scaling up our infrastructure and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with our growth. In addition, as a result of the capital-intensive nature of our business, we can be expected to continue to sustain substantial operating expenses without generating sufficient revenue to cover expenditures. Any investment in our company is therefore highly speculative and could result in the loss of your entire investment.

Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

You must consider the risks and difficulties we face as an early stage company with a limited operating history. If we do not successfully address these risks, our business, prospects, operating results and financial condition will be materially and adversely harmed. We have a very limited operating history on which investors can base an evaluation of our business, operating results and prospects. We intend to derive substantially all of our revenue from the sale and lease of our vehicle platforms, which are still in the early stages of development. Our revenue will also depend on the sale of hydrogen fuel at our planned hydrogen fueling stations which we do not expect to be operational until 2023 or later. There are no assurances that we will be able to secure future business with the major trucking companies or with independent truck drivers.

It is difficult to predict our future revenue and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business. In the event that actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial position could be materially affected.

We will need to raise additional funds and these funds may not be available to us when we need them. If we cannot raise additional funds when we need them, our operations and prospects could be negatively affected.

The design, manufacture, lease, sale and servicing of vehicles and related hydrogen fueling stations is capital-intensive. We expect that we will have sufficient capital to fund our planned operations for the next 12 months. We will need to raise additional capital to scale our manufacturing and roll out our hydrogen fueling stations. We may raise additional funds through the issuance of equity, equity related or debt securities, strategic partnerships, licensing arrangements, or through obtaining credit from government or financial institutions. This capital will be necessary to fund our ongoing operations, continue research, development and design efforts, improve infrastructure, introduce new vehicles and build hydrogen fueling stations. We cannot be certain that additional funds will be available to us on favorable terms when required, or at all. If we raise funds by issuing equity securities, dilution to our stockholders would result. Any equity securities issued also may provide for rights, preferences or privileges senior to those of holders of our common stock. The terms of debt securities issued or borrowings, if available, could impose significant restrictions on our operations. If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or products, or grant licenses on terms that are not favorable to us.

If we cannot raise additional funds when we need them, our financial condition, results of operations, business and prospects could be materially adversely affected. In addition, sales of a substantial number of shares of our common stock in the

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public market or the perception that these sales might occur, including pursuant to the Purchase Agreement or the Second Purchase Agreement, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.

If we fail to manage our future growth effectively, we may not be able to market and sell our vehicles successfully.

Any failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial condition. We intend to expand our operations significantly. Our future expansion will include:

•training new personnel;

•forecasting production and revenue;

•controlling expenses and investments in anticipation of expanded operations;

•establishing or expanding design, manufacturing, sales and service facilities; and

•implementing and enhancing administrative infrastructure, systems and processes.

We intend to continue to hire a significant number of additional personnel, including design and manufacturing personnel and service technicians for our trucks. Because our trucks are based on a different technology platform than traditional internal combustion engines, individuals with sufficient training in alternative fuel and electric vehicles may not be available to hire, and as a result, we will need to expend significant time and expense training the employees we do hire.

Our bundled lease model may present unique problems that may have an adverse effect on our operating results and business and harm our reputation.

Our bundled lease model, which is intended to provide customers with the FCEV truck, hydrogen fuel and maintenance for a fixed price per mile, is reliant on our ability to achieve a minimum hydrogen fuel efficiency in our FCEV trucks. If we are unable to achieve or maintain this fuel efficiency, we may be forced to provide our bundled lease customers with fuel at prices below-cost or risk damaging our relationships with our customers. Any such scenario would put our bundled lease model in jeopardy and may have a material adverse effect on our business, prospects, operating results and financial condition.

We may face legal challenges in one or more states attempting to sell directly to customers which could materially adversely affect our costs.

Our business plan includes the direct sale of vehicles to business customers, and potentially, to individual customers. Most, if not all, states require a license to sell vehicles within the state. Many states prohibit manufacturers from directly selling vehicles to customers. In other states, manufacturers must operate a physical dealership within the state to deliver vehicles to customers. As a result, we may not be able to sell directly to customers in each state in the United States.

We are currently not registered as a dealer in any state. In many states, it is unclear if, as a manufacturer, we will be able to obtain permission to sell and deliver vehicles directly to customers. For customers residing in states in which we will not be allowed to sell or deliver vehicles, we may have to arrange alternate methods of delivery of vehicles. This could include delivering vehicles to adjacent or nearby states in which we are allowed to directly sell and ship vehicles, and arranging for the customer to transport the vehicles to their home states. These workarounds could add significant complexity and, as a result, costs, to our business.

We face risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries.

We are subject to, and may become a party to, a variety of litigation, other claims, suits, regulatory actions and government investigations and inquiries. For example, in September 2020, Nikola and our officers and employees received subpoenas from the SEC as part of a fact-finding inquiry related to aspects of our business as well as certain matters described in an article issued on September 10, 2020 by Hindenburg Research LLC, or the Hindenburg article. The SEC issued subpoenas to our directors on September 30, 2020. In addition, Nikola and Trevor R. Milton also received grand jury subpoenas from the U.S. Attorney’s Office for the Southern District of New York and the N.Y. County District Attorney’s Office in September 2020. On July 29, 2021, the U.S. Attorney for the Southern District of New York (“SDNY”) announced the unsealing of a criminal indictment charging Trevor Milton with two counts of securities fraud and one count of wire fraud. That same day, the Securities and Exchange Commission announced charges against Mr. Milton for alleged violations of federal securities laws.

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We have cooperated, and will continue to cooperate, with these and any other regulatory or governmental requests. We have incurred significant expenses as a result of the regulatory and legal matters relating to the Hindenburg article. The total cost associated with these matters will depend on many factors, including the duration of these matters and any related finding.

We and the Staff of the Division of Enforcement have been engaged in discussions regarding a resolution to the SEC’s investigation. Based on the advancement of those discussions in October 2021, we reserved a $125 million loss as our best estimate of the contingency in accrued liabilities as of September 30, 2021, and in selling, general, and administrative expenses for the three and nine months ended September 30, 2021, on the consolidated financial statements. While any resolution cannot be finalized until voted upon by the full Commission, if approved, this resolution is expected to include a $125 million civil penalty paid over time and findings of violations by us of Section 10(b) and Rule 10b-5 of the Securities Exchange Act. We continue to cooperate with the Division of Enforcement to fully resolve the matter. There can be no assurance as to the timing or final terms of any resolution, and we may not be able to reach a resolution at all. Final resolution of this matter is subject to documentation satisfactory to all the parties, and completion of any settlement is contingent on a vote of the Commissioners of the SEC.

Additionally, six putative class action lawsuits were filed against us and certain of our current and former officers and directors, asserting violations of federal securities laws under Section 10(b) and Section 20(a) of the Exchange Act, and, in one case, violations of the Unfair Competition Law under California law, alleging that Nikola and certain of our officers and directors made false and/or misleading statements in press releases and public filings regarding our business plan and prospects. These lawsuits have been consolidated. Separately, three purported Nikola stockholder derivative actions were filed in the United States District Court, against certain of our current and former directors, alleging breaches of fiduciary duties, violations of Section 14(a) of the Exchange Act, and gross mismanagement, among other claims. We are unable to estimate the potential loss or range of loss, if any, associated with these lawsuits.

In addition, from time to time, we may also be involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with collaboration partners, intellectual property disputes, and other business matters. Any such claims or investigations may be time-consuming, costly, divert management resources, or otherwise have a material adverse effect on our business or result of operations.

The results of litigation and other legal proceedings, including the other claims described under Note 12, Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and in Note 14 in our Annual Report on Form 10-K/A for the year ended December 31, 2020, are inherently uncertain and adverse judgments or settlements in some or all of these legal disputes may result in materially adverse monetary damages or injunctive relief against us. Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or obtain adequate insurance in the future. The litigation and other legal proceedings described under Note 12, Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and to Note 14 in our Annual Report on Form 10-K/A for the year ended December 31, 2020 are subject to future developments and management’s view of these matters may change in the future.

Our success will depend on our ability to economically manufacture our trucks at scale and build our hydrogen fueling stations to meet our customers’ business needs, and our ability to develop and manufacture trucks of sufficient quality and appeal to customers on schedule and at scale is unproven.

Our future business depends in large part on our ability to execute our plans to develop, manufacture, market and sell our BEV and FCEV trucks and to deploy the associated hydrogen fueling stations for our FCEV trucks at sufficient capacity to meet the transportation demands of our business customers. We plan to initially commence manufacturing our trucks in Europe through our joint venture with CNH Industrial N.V., or CNHI and Iveco S.p.A., or Iveco, which commenced operations in the fourth quarter of 2020 and started trial production in the second quarter of 2021, and in the future at our manufacturing plant in Arizona.

Our continued development of our truck platforms is and will be subject to risks, including with respect to:

•our ability to secure necessary funding;

•the equipment we plan to use being able to accurately manufacture the vehicles within specified design tolerances;

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•long-and short-term durability of our hydrogen fuel cell and electric drivetrain technology related components in the day-to-day wear and tear of the commercial trucking environment;

•compliance with environmental, workplace safety and similar regulations;

•securing necessary components on acceptable terms and in a timely manner;

•delays in delivery of final component designs to our suppliers;

•our ability to attract, recruit, hire and train skilled employees;

•quality controls, particularly as we plan to commence manufacturing in-house;

•delays or disruptions in our supply chain; and

•other delays and cost overruns.

We have no experience to date in high volume manufacturing of our trucks. We do not know whether we will be able to develop efficient, automated, low-cost manufacturing capabilities and processes, and reliable sources of component supply, that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully mass market our trucks. Even if we are successful in developing our high volume manufacturing capability and processes and reliably source our component supply, we do not know whether we will be able to do so in a manner that avoids significant delays and cost overruns, including as a result of factors beyond our control such as problems with suppliers and vendors, or in time to meet our vehicle commercialization schedules or to satisfy the requirements of customers. Any failure to develop such manufacturing processes and capabilities within our projected costs and timelines could have a material adverse effect on our business, prospects, operating results and financial condition.

We may experience significant delays in the design, manufacture, launch and financing of our trucks, including in the build out of our manufacturing plant, which could harm our business and prospects.

Any delay in the financing, design, manufacture and launch of our trucks, including in the build out of our manufacturing plant in Arizona, could materially damage our brand, business, prospects, financial condition and operating results. Vehicle manufacturers often experience delays in the design, manufacture and commercial release of new products. To the extent we delay the launch of our trucks, our growth prospects could be adversely affected as we may fail to grow our market share. Furthermore, we rely on third party suppliers for the provision and development of many of the key components and materials used in our vehicles. To the extent our suppliers experience any delays in providing us with or developing necessary components, we could experience delays in delivering on our timelines.

Increases in costs, disruption of supply or shortage of raw materials, including but not limited to lithium-ion battery cells, chipsets, and displays, could harm our business.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials, including battery cells, semiconductors, and integrated circuits which primarily impact our infotainment system and controllers. Any such increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. Currently, we are experiencing supply chain shortages, including with respect to battery cells, integrated circuits, vehicle control chips, and displays. Certain production ready components such as chipsets and displays may not arrive at our facilities until the first quarter