Filed pursuant to Rule 424(b)(3)

Registration No. 333-239940

PROSPECTUS SUPPLEMENT NO. 31

(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 current report on Form 8-K, filed with the Securities and Exchange Commission on August 4, 2022 (the “Current Report”). Accordingly, we have attached the Current 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 August 3, 2022, the closing price of our Common Stock was $7.48.

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 August 4, 2022.

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 June 30, 2022

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 August 1, 2022, there were 433,476,331 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	8
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 6.	Exhibits	72
Signatures		73

Summary of 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.

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

1

•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 expansion of our manufacturing plant, which could harm our business and prospects.

•Increases in costs, disruption of supply or shortage of raw materials, including lithium-ion battery cells and packs, 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)

	June 30,		December 31,
	2022		2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	441,765	$	497,241
Accounts receivable, net	16,726		—
Inventory	52,105		11,597
Prepaid expenses and other current assets	34,802		15,891
Total current assets	545,398		524,729
Restricted cash and cash equivalents	87,459		25,000
Long-term deposits	37,740		27,620
Property, plant and equipment, net	311,732		244,377
Intangible assets, net	95,395		97,181
Investment in affiliates	79,726		61,778
Goodwill	5,238		5,238
Other assets	4,287		3,896
Total assets	$	1,166,975	$	989,819
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	87,479	$	86,982
Accrued expenses and other current liabilities	156,610		93,487
Debt and finance lease liabilities, current	9,518		140
Total current liabilities	253,607		180,609
Long-term debt and finance lease liabilities, net of current portion	273,309		25,047
Operating lease liabilities	2,349		2,263
Warrant liability	1,377		4,284
Other long-term liabilities	37,070		84,033
Deferred tax liabilities, net	12		11
Total liabilities	567,724		296,247
Commitments and contingencies (Note 9)
Stockholders' equity
Preferred stock, $0.0001 par value, 150,000,000 shares authorized, no shares issued and outstanding as of June 30, 2022 and December 31, 2021	—		—
Common stock, $0.0001 par value, 600,000,000 shares authorized, 433,475,084 and 413,340,550 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	43		41
Additional paid-in capital	2,176,945		1,944,341
Accumulated deficit	(1,576,550)		(1,250,612)
Accumulated other comprehensive loss	(1,187)		(198)
Total stockholders' equity	599,251		693,572
Total liabilities and stockholders' equity	$	1,166,975	$	989,819

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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues:
Truck sales	$	17,383	$	—	$	17,383	$	—
Service and other	751		—		2,638		—
Total revenues	18,134		—		20,021		—
Cost of revenues:
Truck sales	46,781		—		46,781		—
Service and other	610		—		2,066		—
Total cost of revenues	47,391		—		48,847		—
Gross loss	(29,257)		—		(28,826)		—
Operating expenses:
Research and development	63,106		67,726		137,663		122,889
Selling, general, and administrative	79,868		70,672		157,051		136,099
Total operating expenses	142,974		138,398		294,714		258,988
Loss from operations	(172,231)		(138,398)		(323,540)		(258,988)
Other income (expense):
Interest expense, net	(2,808)		(92)		(3,019)		(101)
Revaluation of warrant liability	3,341		(2,511)		2,907		(1,560)
Other income (expense), net	(27)		(1,102)		1,806		(883)
Loss before income taxes and equity in net loss of affiliates	(171,725)		(142,103)		(321,846)		(261,532)
Income tax expense	2		2		2		3
Loss before equity in net loss of affiliates	(171,727)		(142,105)		(321,848)		(261,535)
Equity in net loss of affiliates	(1,270)		(1,126)		(4,090)		(1,920)
Net loss	$	(172,997)	$	(143,231)	$	(325,938)	$	(263,455)
Net loss per share:
Basic	$	(0.41)	$	(0.36)	$	(0.78)	$	(0.67)
Diluted	$	(0.41)	$	(0.36)	$	(0.78)	$	(0.67)
Weighted-average shares outstanding:
Basic	425,323,391		394,577,711		420,266,181		393,390,377
Diluted	425,323,391		394,577,711		420,266,181		393,390,377

See accompanying notes to the consolidated financial statements.

4

NIKOLA CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net loss	$	(172,997)	$	(143,231)	$	(325,938)	$	(263,455)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax	(1,318)		78		(989)		(235)
Comprehensive loss	$	(174,315)	$	(143,153)	$	(326,927)	$	(263,690)

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 June 30, 2022
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance as of March 31, 2022	418,344,072	$	42	$	2,025,552	$	(1,403,553)	$	131	$	622,172
Exercise of stock options	105,754	—		257		—		—		257
Issuance of shares for RSU awards	1,420,658	—		—		—		—		—
Common stock issued under Tumim Purchase Agreements	13,604,600	1		96,295		—		—		96,296
Stock-based compensation	—	—		54,841		—		—		54,841
Net loss	—	—		—		(172,997)		—		(172,997)
Other comprehensive loss	—	—		—		—		(1,318)		(1,318)
Balance as of June 30, 2022	433,475,084	$	43	$	2,176,945	$	(1,576,550)	$	(1,187)	$	599,251

	Six Months Ended June 30, 2022
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance as of December 31, 2021	413,340,550	$	41	$	1,944,341	$	(1,250,612)	$	(198)	$	693,572
Exercise of stock options	285,585	—		565		—		—		565
Issuance of shares for RSU awards	2,600,705	—		—		—		—		—
Common stock issued under Tumim Purchase Agreements	17,248,244	2		123,670		—		—		123,672
Stock-based compensation	—	—		108,369		—		—		108,369
Net loss	—	—		—		(325,938)		—		(325,938)
Other comprehensive loss	—	—		—		—		(989)		(989)
Balance as of June 30, 2022	433,475,084	$	43	$	2,176,945	$	(1,576,550)	$	(1,187)	$	599,251

See accompanying notes to the consolidated financial statements.

6

	Three Months Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance as of March 31, 2021	393,745,157	$	39	$	1,592,716	$	(680,398)	$	(74)	$	912,283
Exercise of stock options	1,033,250	1		1,212		—		—		1,213
Issuance of shares for RSU awards	461,084	—		—		—		—		—
Common stock issued for commitment shares	155,703	—		2,625		—		—		2,625
Common stock issued for investment in affiliates, net of common stock with embedded put right	1,682,367	—		19,139		—		—		19,139
Stock-based compensation	—	—		52,670		—		—		52,670
Net loss	—	—		—		(143,231)		—		(143,231)
Other comprehensive income	—	—		—		—		78		78
Balance as of June 30, 2021	397,077,561	$	40	$	1,668,362	$	(823,629)	$	4	$	844,777

	Six Months Ended June 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	2,929,917	1		3,625		—		—		3,626
Issuance of shares for RSU awards	1,268,227	—		—		—		—		—
Common stock issued for commitment shares	155,703	—		2,625		—		—		2,625
Common stock issued for investment in affiliates, net of common stock with embedded put right	1,682,367	—		19,139		—		—		19,139
Stock-based compensation	—	—		102,936		—		—		102,936
Net loss	—	—		—		(263,455)		—		(263,455)
Other comprehensive loss	—	—		—		—		(235)		(235)
Balance as of June 30, 2021	397,077,561	$	40	$	1,668,362	$	(823,629)	$	4	$	844,777

See accompanying notes to the consolidated financial statements.

7

NIKOLA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities
Net loss	$	(325,938)	$	(263,455)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	9,676		3,710
Stock-based compensation	108,369		102,936
Non-cash in-kind services	—		27,723
Equity in net loss of affiliates	4,090		1,920
Revaluation of financial instruments	192		1,560
Issuance of common stock for commitment shares	—		2,625
Inventory write-downs	10,890		—
Non-cash interest expense	2,457		—
Other non-cash activity	273		1,010
Changes in operating assets and liabilities:
Accounts receivable, net	(16,726)		—
Inventory	(60,468)		(2,267)
Prepaid expenses and other current assets	(12,631)		(4,024)
Accounts payable, accrued expenses and other current liabilities	15,395		9,535
Long-term deposits	(8,281)		(7,247)
Other assets	(608)		—
Operating lease liabilities	(277)		—
Other long-term liabilities	(224)		—
Net cash used in operating activities	(273,811)		(125,974)
Cash flows from investing activities
Purchases and deposits of property, plant and equipment	(67,316)		(64,787)
Investments in affiliates	(23,027)		(25,000)
Proceeds from sale of equipment	—		200
Net cash used in investing activities	(90,343)		(89,587)
Cash flows from financing activities
Proceeds from the exercise of stock options	565		3,839
Proceeds from issuance of shares under the Tumim Purchase Agreements	123,672		—
Proceeds from issuance of Convertible Notes, net of discount and issuance costs	183,510		—
Proceeds from issuance of Collateralized Promissory Note	50,000		—
Proceeds from issuance of financing obligation, net of issuance costs	38,582		—
Repayment of Promissory Note	(25,000)		(4,100)
Payments on finance lease liabilities and financing obligation	(192)		(518)
Payments for issuance costs	—		(244)
Net cash provided by (used in) financing activities	371,137		(1,023)
Net increase (decrease) in cash and cash equivalents, including restricted cash	6,983		(216,584)
Cash and cash equivalents, including restricted cash, beginning of period	522,241		849,278
Cash and cash equivalents, including restricted cash, end of period	$	529,224	$	632,694

See accompanying notes to the consolidated financial statements.

8

Supplementary cash flow disclosures:
Cash paid for interest	$	953	$	372
Cash interest received	$	100	$	384
Supplementary disclosures for noncash investing and financing activities:
Purchases of property, plant and equipment included in liabilities	$	26,207	$	33,389
Accrued paid in kind interest	$	1,784	$	—
Embedded derivative asset bifurcated from Convertible Notes	$	1,500	$	—
Accrued debt issuance costs	$	294	$	—
Accrued deferred issuance costs	$	—	$	352
Leased assets obtained in exchange for new finance lease liabilities	$	692	$	145
Common stock issued for commitment shares	$	—	$	2,625
Common stock issued for investments in affiliates, including common stock with embedded put right	$	—	$	32,376

See accompanying notes to the consolidated financial statements.

9

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.

(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 included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

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.

Additionally, prior to the start of production for the Tre battery-electric vehicle ("BEV") trucks late in the first quarter of 2022, pre-production activities, including manufacturing readiness, process validation, prototype builds, freight, inventory write-downs, and operations of the Company's manufacturing facility in Coolidge, Arizona were recorded as research and development activities on the Company's consolidated statements of operations. Commensurate with the start of production, manufacturing costs, including labor and overhead, as well as inventory-related expenses related to the Tre BEV trucks, and related facility costs, are recorded in cost of revenues beginning in the second quarter of 2022.

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.

See accompanying notes to the consolidated financial statements.

10

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 June 30, 2022 and December 31, 2021, the Company had $441.8 million and $497.2 million of cash and cash equivalents, which included cash equivalents of zero and $463.9 million of highly liquid investments as of June 30, 2022 and December 31, 2021, respectively.

As of June 30, 2022 and December 31, 2021, the Company had $87.5 million and $25.0 million, respectively, in non-current restricted cash. Restricted cash represents cash that is restricted as to withdrawal or usage and consists of securitization of the Company's letters of credit and debt. See Note 5, Debt and Finance Lease Liabilities, for additional details.

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:

	As of
	June 30, 2022		December 31, 2021		June 30, 2021
Cash and cash equivalents	$	441,765	$	497,241	$	632,694
Restricted cash and cash equivalents – non-current	87,459		25,000		—
Cash, cash equivalents and restricted cash and cash equivalents	$	529,224	$	522,241	$	632,694

(b)Accounts Receivable, net

Accounts receivable, net, are reported at the invoiced amount, less an allowance for potential uncollectible amounts. The Company had no allowance for uncollectible amounts as of June 30, 2022 and December 31, 2021.

(c)Fair Value of Financial Instruments

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

	As of June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Derivative asset	$	—	$	—	$	800	$	800
Liabilities
Warrant liability	$	—	$	—	$	1,377	$	1,377
Derivative liability	—		—		6,588		6,588

	As of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents – money market	$	463,867	$	—	$	—	$	463,867
Liabilities
Warrant liability	$	—	$	—	$	4,284	$	4,284
Derivative liability	—		—		4,189		4,189

11

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Warrant liability

As a result of the Company's business combination with VectoIQ Acquisition Corp. ("VectoIQ") in June 2020 (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 is 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:

	Warrant Liability
Estimated fair value at December 31, 2021	$	4,284
Change in fair value	(2,907)
Estimated fair value at June 30, 2022	$	1,377

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
	June 30, 2022			December 31, 2021
Stock price	$	4.76		$	9.87
Exercise price	$	11.50		$	11.50
Remaining term (in years)	2.93			3.42
Volatility	90		%	90		%
Risk-free rate	2.96		%	1.03		%
Expected dividend yield	—		%	—		%

Price Differential derivative liability

On September 13, 2021, the Company entered into an Amended Membership Interest Purchase Agreement (the "Amended MIPA") with Wabash Valley Resources ("WVR") and the sellers party thereto (each, a "Seller"), pursuant to which the Company is subject to the first price differential and second price differential (together the "Price Differential"). Pursuant to the terms of the Amended MIPA, the first price differential was settled in the fourth quarter of 2021 for $3.4 million.

The Price Differential was a freestanding financial instrument and accounted for as a derivative liability. The derivative liability was 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 December 31, 2021	$	4,189
Change in fair value	2,399
Estimated fair value at June 30, 2022	$	6,588

12

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The fair value of the derivative liability, a level 3 measurement, was estimated using a Monte Carlo simulation model as of December 31, 2021. 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
	December 31, 2021
Stock price	$	9.87
Strike price	$	14.86
Volatility	100		%
Risk-free rate	0.18		%

The fair value as of June 30, 2022, was based on the settlement amount that was subsequently paid on July 1, 2022.

Put Premium derivative asset

In June 2022, the Company completed a private placement of $200 million aggregate principal amount of unsecured 8.00% / 11.00% convertible senior paid in kind ("PIK") toggle notes (the “Convertible Notes”). In conjunction with the issuance of the Convertible Notes, the Company entered into a premium letter agreement (the "Put Premium") with the purchasers (the "Purchasers") of the Convertible Notes which requires the Purchasers to pay $9.0 million to the Company if during the period through the date that is thirty months after the closing date of the private placement of Convertible Notes, the last reported sale price of the Company's common stock has been at least $20.00 for at least 20 trading days during any consecutive 40 trading day periods.

The Put Premium is an embedded derivative asset and meets the criteria to be separated from the host contract and carried at fair value. The derivative is measured both initially and in subsequent periods at fair value, with changes in fair value recognized in "Other income (expense), net" on the consolidated statements of operations. The fair value of the derivative asset is included in "Other assets" on the consolidated balance sheets. The change in fair value of the derivative asset was as follows:

	Derivative asset
Estimated fair value as of June 1, 2022	$	1,500
Change in fair value	(700)
Estimated fair value as of June 30, 2022	$	800

The fair value of the derivative asset, 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
	June 30, 2022			June 1, 2022
Stock price	$	4.76		$	6.77
Threshold price	$	20.00		$	20.00
Term (in years)	2.4			2.5
Volatility	90		%	90		%
Risk-free rate	2.93		%	2.73		%
Payer cost of debt	5.00		%	4.30		%

Disclosure of Fair Values

Financial instruments that are not re-measured at fair value include accounts receivable, accounts payable, accrued liabilities, deposits and debt. The carrying values of these financial instruments approximate their fair values, other than debt obligations, including the Convertible Notes and the $50.0 million collateralized promissory note ("Collateralized Note") issued during the second quarter of 2022.

13

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The fair value of debt obligations are estimated using level 2 fair value inputs, including stock price and risk-free rates. The following table presents the carrying value and estimated fair values:

	As of June 30, 2022
	Carrying Value		Fair Value
Convertible Notes	$	186,805	$	141,000
Collateralized Promissory Note	50,000		50,000

(d)Revenue Recognition

Truck sales

Truck sales consist of revenue recognized on the sales of the Company's BEV trucks. The sale of a truck is recognized as a single performance obligation at the point in time when control is transferred to the customer (dealers). Control is deemed transferred when the product is picked up by the carrier and the customer (dealer) can direct the product's use and obtain substantially all of the remaining benefits from the product. The Company does not offer returns on truck sales.

Payment for trucks sold are made in accordance with the Company's customary payment terms. The Company has elected an accounting policy whereby the Company does not adjust the promised amount of consideration for the effects of a significant financing component because, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the customer and the time when the customer pays for that good or service will be one year or less. Sales tax collected from customers is not considered revenue and is accrued until remitted to the taxing authorities. Shipping and handling activities occur after the customer has obtained control of the product, thus the Company has elected to account for those expenses as fulfillment costs in cost of revenues, rather than an additional promised service.

Services and other

Services and other revenues consist of sales of mobile charging trailers ("MCTs"). The sale of MCTs is recognized as a single performance obligation at the point in time when control is transferred to the customer. Control is deemed transferred when the product is delivered to the customer and the customer can direct the product's use and obtain substantially all of the remaining benefits from the asset. The Company does not offer sales returns on MCTs. Payment for products sold are made in accordance with the Company's customary payment terms and the Company's MCT contracts do not have significant financing components. The Company has elected to exclude sales taxes from the measurement of the transaction price.

(e)Warranties

Warranty costs are recognized upon transfer of control of trucks to dealers, and is estimated based on factors including the length of the warranty, product costs, supplier warranties, and product failure rates. Warranty reserves are reviewed and adjusted quarterly to ensure that accruals are adequate to meet expected future warranty obligations. Initial warranty data is limited early in the launch of a new product and accordingly, future adjustments to the warranty accrual may be material.

The change in warranty liability for the three and six months ended June 30, 2022 is summarized as follows:

	Three Months Ended		Six Months Ended
	June 30, 2022		June 30, 2022
Accrued warranty - beginning of period	$	—	$	—
Provision for warranty	2,203		2,203
Accrued warranty - end of period	$	2,203	$	2,203

As of June 30, 2022, warranty accrual for $0.6 million is recorded in "Accrued expenses and other current liabilities" and $1.6 million in "Other long-term liabilities" on the consolidated balance sheets.

14

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(f)Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2021-10, Government Assistance, to increase transparency of government assistance which requires annual disclosures about transactions with a government entity that are accounted for by applying a grant or contribution accounting model by analogy. ASU 2021-10 is effective for annual periods beginning after December 15, 2021 and early adoption is permitted. The Company will adopt ASU 2021-10 for the year ended December 31, 2022, which will have an immaterial impact to the Company's consolidated financial statements.

3.BALANCE SHEET COMPONENTS

Inventory

Inventory consisted of the following at June 30, 2022 and December 31, 2021, respectively:

	As of
	June 30, 2022		December 31, 2021
Raw materials	$	41,213	$	7,344
Work in process	5,696		4,253
Finished goods	5,196		—
Total inventory	$	52,105	$	11,597

Inventory cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. Inventories are stated at the lower of cost or net realizable value. Inventories are written down for any excess or obsolescence and when net realizable value, which is based upon estimated selling prices, is in excess of carrying value. Once inventory is written-down, a new, lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following at June 30, 2022 and December 31, 2021, respectively:

	As of
	June 30, 2022		December 31, 2021
Deposits	$	14,397	$	5,615
Non-trade receivables	11,815		2,717
Prepaid expenses	7,329		5,116
Deferred implementation costs	1,261		2,443
Total prepaid expenses and other current assets	$	34,802	$	15,891

Deferred implementation costs

Deferred implementation costs are amortized on a straight-line basis over the estimated useful life of the related software. During the three months ended June 30, 2022, the Company re-assessed the estimated useful life of its existing enterprise resource planning system as a result of ongoing re-implementation, resulting in a shorter useful life and prospective change in amortization. The Company recorded $1.2 million and $1.3 million of amortization expense on the consolidated statements of operations for the three and six months ended June 30, 2022, respectively. Amortization during the three and six months ended June 30, 2021 was immaterial.

15

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following at June 30, 2022 and December 31, 2021:

	As of
	June 30, 2022		December 31, 2021
Buildings	$	127,204	$	104,333
Construction-in-progress	126,849		103,515
Machinery and equipment	49,544		36,551
Demo vehicles	9,958		888
Software	8,309		7,562
Other	7,174		3,026
Leasehold improvements	2,886		2,883
Furniture and fixtures	1,480		1,480
Finance lease assets	1,338		646
Property, plant and equipment, gross	334,742		260,884
Less: accumulated depreciation and amortization	(23,010)		(16,507)
Total property, plant and equipment, net	$	311,732	$	244,377

Construction-in-progress on the Company's consolidated balance sheets as of June 30, 2022 relates primarily to the expansion of the Company's manufacturing plant in Coolidge, Arizona, and build-out of the Company's headquarters and R&D facility in Phoenix, Arizona.

Depreciation expense for the three months ended June 30, 2022 and 2021 was $3.5 million and $1.9 million, respectively. Depreciation expense for the six months ended June 30, 2022 and 2021 was $6.6 million and $3.6 million, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following at June 30, 2022 and December 31, 2021:

	As of
	June 30, 2022		December 31, 2021
Settlement liability	$	75,000	$	50,000
Inventory received not yet invoiced	21,577		8,253
Accrued purchase of intangible asset	20,902		11,344
Accrued legal expenses	17,644		5,664
Derivative liability	6,588		4,189
Accrued payroll and payroll related expenses	3,604		2,521
Accrued purchases of property, plant and equipment	1,630		2,817
Other accrued expenses	9,665		8,699
Total accrued expenses and other current liabilities	$	156,610	$	93,487

16

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. INVESTMENTS IN AFFILIATES

Investments in unconsolidated affiliates accounted for under the equity method consist of the following:

			As of
	Ownership		June 30, 2022		December 31, 2021
Nikola Iveco Europe GmbH	50	%	$	20,832	$	4,083
Wabash Valley Resources LLC	20	%	57,894		57,695
Nikola - TA HRS 1, LLC	50	%	1,000		—
			$	79,726	$	61,778

Equity in net loss of affiliates on the consolidated statements of operations for the three and six months ended June 30, 2022 and 2021, were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Equity in net loss of affiliates:
Nikola Iveco Europe GmbH	$	(1,201)	$	(1,126)	$	(4,039)	$	(1,920)
Wabash Valley Resources LLC	(69)		—		(51)		—
Total equity in net loss of affiliates	$	(1,270)	$	(1,126)	$	(4,090)	$	(1,920)

Nikola Iveco Europe GmbH

In April 2020, the Company and Iveco 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 BEV and FCEV Class 8 trucks for the European and North American markets.

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. 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.

In June 2022, the Company and Iveco executed amended agreements to expand the scope of the joint venture operations to include engineering and development of the Nikola Tre BEV European platform.

During the first quarter of 2022, the Company made a contribution to Nikola Iveco Europe GmbH of €3.0 million (approximately $3.3 million). During the second quarter of 2022, the Company made an additional contribution of €17.0 million (approximately $18.4 million). As of June 30, 2022, the Company's maximum exposure to loss was $31.8 million, which represents the book value of the Company's equity interest and guaranteed debt obligations of $11.0 million.

Wabash Valley Resources LLC

On June 22, 2021, the Company entered into the Membership Interest Purchase Agreement ("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.

The Company's interest in WVR is accounted for under the equity method and is included in "Investment in affiliates" on the Company's consolidated balance sheets. Included in the initial carrying value was a basis difference of $55.5 million due to the difference between the cost of the investment and the Company's proportionate share of WVR's net assets. The basis difference is primarily comprised of property, plant and equipment and intangible assets.

17

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As of June 30, 2022, the Company's maximum exposure to loss was $58.1 million, which represents the book value of the Company's equity interest and a loan to WVR during the second quarter of 2022 for $0.3 million.

Nikola - TA HRS 1, LLC

In March 2022, the Company and Travel Centers of America, Inc. ("TA") entered into a series of agreements which established a joint venture, Nikola - TA HRS 1, LLC. The operations expected to be performed by the joint venture consist of the development, operation and maintenance of a hydrogen fueling station. Operations have not commenced as of June 30, 2022.

The agreements provide for 50/50 ownership of the joint venture. Both parties are entitled to appoint an equal number of board members to the management committee of the joint venture. Pursuant to the terms of the agreements, the Company contributed an initial contribution of $1.0 million to Nikola - TA HRS 1, LLC during the second quarter of 2022.

Nikola - TA HRS 1, LLC is considered a 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.

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 value of the investment.

5. DEBT AND FINANCE LEASE LIABILITIES

Debt and finance lease liabilities as of June 30, 2022 and December 31, 2021, were as follows:

	As of
	June 30, 2022		December 31, 2021
Current:
Promissory notes	$	9,168	$	—
Finance lease liabilities	350		140
Debt and finance lease liabilities, current	$	9,518	$	140
Non-current:
Convertible Notes	$	186,805	$	—
Financing obligation	44,965		—
Promissory notes	40,832		24,639
Finance lease liabilities	707		408
Long-term debt and finance lease liabilities, net of current portion	$	273,309	$	25,047

Convertible Notes

In June 2022, the Company completed a private placement of $200.0 million aggregate principal amount of unsecured 8.00% / 11.00% convertible senior PIK toggle notes, which will mature on May 31, 2026. The Convertible Notes were issued pursuant to an indenture, dated as of June 1, 2022 (the "Indenture").

The Convertible Notes bear interest at 8.00% per annum, to the extent paid in cash (“Cash Interest”), and 11.00% per annum, to the extent paid in kind through the issuance of additional Convertible Notes (“PIK Interest”). Interest is payable semi-annually in arrears on May 31 and November 30 of each year, beginning on November 30, 2022. The Company can elect to make any interest payment through Cash Interest, PIK Interest or any combination thereof.

Based on the applicable conversion rate, the Convertible Notes plus any accrued and unpaid interest are convertible into cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The initial conversion

18

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

rate is 114.3602 shares per $1,000 principal amount of the Convertible Notes, subject to customary anti-dilution adjustment in certain circumstances, which represented an initial conversion price of approximately $8.74 per share.

Prior to February 28, 2026, the Convertible Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, and will be convertible on or after February 28, 2026, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the Convertible Notes.

Holders of the Convertible Notes will have the right to convert all or a portion of their Convertible Notes prior to the close of business on the business day immediately preceding February 28, 2026 only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2022 (and only during such fiscal quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the Convertible Notes on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of that ten consecutive trading day period was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate of the Convertible Notes on each such trading day; (iii) if the Company calls such Convertible Notes for redemption, at any time prior to the close of business on the second business day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events.

The Company may not redeem the Convertible Notes prior to the third anniversary of the date of initial issuance of the Convertible Notes. The Company may redeem the Convertible Notes in whole or in part, at its option, on or after such date and prior to the 26th scheduled trading day immediately preceding the maturity date, for a cash purchase price equal to the aggregate principal amount of any Convertible Notes to be redeemed plus accrued and unpaid interest.

In addition, following certain corporate events that occur prior to the maturity date or following issuance by the Company of a notice of redemption, in each case as provided in the Indenture, in certain circumstances, the Company will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event or who elects to convert any Convertible Notes called for redemption during the related redemption period. Additionally, in the event of a fundamental change or a change in control transaction (each such term as defined in the Indenture), holders of the Convertible Notes will have the right to require the Company to repurchase all or a portion of their Convertible Notes at a price equal to 100% of the capitalized principal amount of Convertible Notes, in the case of a fundamental change, or 130% of the capitalized principal amount of Convertible Notes, in the case of change in control transactions, in each case plus any accrued and unpaid interest to, but excluding, the repurchase date.

The Indenture includes restrictive covenants that, subject to specified exceptions, limit the ability of the Company and its subsidiaries to incur secured debt in excess of $500.0 million, incur other subsidiary guarantees, and sell equity interests of any subsidiary that guarantees the Convertible Notes. In addition, the Indenture includes customary terms and covenants, including certain events of default after which the holders may accelerate the maturity of the Convertible Notes and become due and payable immediately.

In conjunction with the issuance of the Convertible Notes, the Company executed the Put Premium which was determined to be an embedded derivative that met the criteria for bifurcation from the host. The total proceeds received were first allocated to the fair value of the bifurcated derivative asset, and the remaining proceeds allocated to the host resulting in an adjustment to the initial purchasers' debt discount.

The net proceeds from the sale of the Convertible Notes were $183.2 million, net of initial purchasers' discounts and debt issuance costs. Unamortized debt discount and issuance costs are reported as a direct deduction from the face amount of the Convertible Notes.

As of June 30, 2022, the effective interest rate on the Convertible Notes was 12.99%. Amortization of the debt discount and issuance costs is reported as a component of interest expense and is computed using the straight-line method over the term of the Convertible Notes, which approximates the effective interest method. For the three and six months ended June 30, 2022 the Company recognized $2.1 million of interest expense related to contractual interest expense and amortization

19

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

of the debt discount and issuance costs. The net carrying amounts of the debt component of the Convertible Notes were as follows:

	As of
	June 30, 2022
Principal amount	$	200,000
PIK interest(1)	1,784
Unamortized discount	(7,350)
Unamortized issuance costs	(7,629)
Net carrying amount	$	186,805

(1)PIK interest consists of $1.8 million accrued PIK interest.

Financing Obligation

On May 10, 2022 (the "Sale Date"), the Company entered into a sale agreement (the "Sale Agreement"), pursuant to which the Company sold the land and property related to the Company's headquarters in Phoenix, Arizona for a purchase price of $52.5 million. As of the Sale Date, $13.1 million was withheld from the proceeds received related to portions of the headquarters currently under construction. The Company will receive the remaining proceeds throughout the completion of construction pursuant to the terms of the Sale Agreement. Concurrent with the sale, the Company entered into a lease agreement (the "Lease Agreement"), whereby the Company leased back the land and property related to the headquarters for an initial term of 20 years with four extension options for 7 years each. As of the Sale Date, the Company considered one extension option reasonably certain of being exercised.

The buyer is not considered to have obtained control of the headquarters because the lease is classified as a finance lease. Accordingly, the sale of the headquarters is not recognized and the property and land continue to be recognized on the Company's consolidated balance sheets. As of the Sale Date, the Company recorded $38.3 million as a financing obligation on the Company's consolidated balance sheets representing proceeds received net of debt issuance costs of $1.1 million. Rent payments under the terms of the Lease Agreement will be allocated between interest expense and principal repayments using the effective interest method. Additionally, debt issuance costs will be amortized to interest expense over the lease term.

During the three months ended June 30, 2022, the Company recognized an additional $6.7 million for financing obligations on the Company's consolidated balance sheets for construction completed during the period. Additionally, for the three months ended June 30, 2022, the Company recognized $0.5 million of interest expense related to interest on the financing obligation and amortization of debt issuance costs.

Promissory Note

On May 10, 2022, and in connection with the execution of the sale and leaseback of the Company's headquarters, the Company repaid the $25.0 million promissory note that was executed in conjunction with the Company purchasing its headquarters in the fourth quarter of 2021 (the "Promissory Note").

For the three and six months ended June 30, 2022, the Company recognized $0.1 million and $0.3 million, respectively, of interest expense related to interest on the Promissory Note and amortization of debt issuance costs prior to redemption. As of May 10, 2022, the Company expensed $0.3 million of unamortized debt issuance costs related to the Promissory Note.

Collateralized Promissory Note

On June 7, 2022, a wholly owned subsidiary of the Company executed a promissory note and a master security agreement (the "Master Security Agreement") for $50.0 million at a stated interest rate of 4.26% (the "Collateralized Note"). The Collateralized Note is fully collateralized by certain personal property assets as fully described in the Master Security Agreement. Additionally, in connection with the Collateralized Note, the Company executed a pledge agreement pursuant to which the Company pledged $50.0 million in cash as additional collateral in order to obtain a more favorable interest rate. The amount pledged is recorded in "Restricted cash and cash equivalents" as of June 30, 2022. The Collateralized Note carries a 60 month term and is payable in 60 equal consecutive monthly installments due in arrears.

20

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

For the three and six months ended June 30, 2022, the Company recognized $0.1 million of interest expense related to interest on the Collateralized Note.

Letters of Credit

During the second quarter of 2022, and in conjunction with the execution of the Lease Agreement, the Company executed an irrevocable standby letter of credit for $12.5 million to collateralize the Company's lease obligation. The letter of credit is subject to annual increases commensurate with base rent increases pursuant to the Lease Agreement. The letter of credit will expire upon the expiration of the Lease Agreement, but may be subject to reduction or early termination upon the satisfaction of certain conditions as described in the Lease Agreement.

During the fourth quarter of 2021, the Company executed an irrevocable standby letter of credit for $25.0 million through December 31, 2024 in connection with the execution of a product supply agreement with a vendor. As of June 30, 2022, no amounts have been drawn on the letter of credit.

6. CAPITAL STRUCTURE

Shares Authorized

As of June 30, 2022, the Company had a total of 750,000,000 shares authorized for issuance consisting of 600,000,000 shares designated as common stock and 150,000,000 shares designated as preferred stock.

Warrants

As of June 30, 2022, 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 June 30, 2022 and 2021, the Company recorded a $3.3 million gain and $2.5 million loss, respectively, for "Revaluation of warrant liability" on the consolidated statements of operations. For the six months ended June 30, 2022 and 2021, the Company recorded a $2.9 million gain and $1.6 million loss, respectively, for "Revaluation of warrant liability" on the consolidated statements of operations. As of June 30, 2022 and December 31, 2021, the Company had $1.4 million and $4.3 million, respectively, for warrant liability related to the private warrants outstanding on the consolidated balance sheets.

The exercise price and number of shares 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

First Purchase Agreement with Tumim Stone Capital LLC

On June 11, 2021, the Company entered into a common stock purchase agreement (the "First Tumim Purchase Agreement") and a registration rights agreement (the "Registration Rights Agreement") with Tumim Stone Capital LLC ("Tumim"), pursuant to which Tumim 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 First Tumim Purchase Agreement. The Company shall not issue or sell any shares of common stock under the First Tumim 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 First Tumim 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 First Tumim 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 First Tumim Purchase Agreement is declared effective by the SEC. Registration statements covering the offer and sale of up to 18,012,845 and 17,025,590 shares of common stock to Tumim were declared effective on June 30, 2021 and March 22, 2022,

21

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

respectively. 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.

During the second quarter of 2021 and concurrently with the signing of the First Tumim 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 six months ended June 30, 2022, the Company sold 13,604,600 and 17,248,244 shares of common stock, respectively, for proceeds of $96.3 million and $123.7 million, respectively, under the terms of the First Tumim Purchase Agreement. No shares were issued under the terms of the First Tumim Purchase Agreement for the three and six months ended June 30, 2021. As of June 30, 2022, the remaining commitment available under the First Tumim Purchase Agreement was $12.5 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 Tumim Purchase Agreement") and a registration rights agreement with Tumim, pursuant to which Tumim 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 Tumim Purchase Agreement. The Company will not issue or sell any shares of common stock under the Second Tumim 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 Tumim 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 Tumim 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 include effectiveness of a registration statement covering the resale of shares of common stock that have been and may be issued under the Second Tumim Purchase Agreement and termination of the First Tumim Purchase Agreement. The registration statement covering the offer and sale of up to 29,042,827 shares of common stock, including the commitment shares, to Tumim was declared effective on November 29, 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.

During the third quarter of 2021 and concurrently with the signing of the Second Tumim 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.

As of June 30, 2022, the Company has not sold any shares of common stock to Tumim under the Second Tumim Purchase Agreement and has a remaining commitment of $300.0 million available.

7. STOCK BASED COMPENSATION EXPENSE

2017 and 2020 Stock Plans

The 2017 Stock Option Plan (the “2017 Plan”) provides for the grant of incentive and nonqualified options to purchase common stock to officers, employees, directors, and consultants. Options were granted at a price not less than the fair market value on the date of grant and generally became 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.

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 provides for the grant of incentive and nonqualified stock options, 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.

22

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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, 2021	28,996,160	$	1.28	6.87
Granted	—	—
Exercised	285,585	1.98
Cancelled	26,836	3.37
Outstanding at June 30, 2022	28,683,739	$	1.27	6.37
Vested and exercisable as of June 30, 2022	28,470,998	$	1.25	6.36

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 June 30, 2022, 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, 2021	12,178,672
Granted	9,456,900
Released	2,600,705
Cancelled	1,039,308
Balance at June 30, 2022	17,995,559

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 Company's stock price target ranges from $25 per share to $55 per share. 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.

In March 2022, the Company granted 949,026 shares of market based RSUs to an executive in connection with his hiring during the period. The grant date fair value of the 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. As of the grant date, the expected volatility in the model was 100% and the risk-free interest rate was

23

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.7%. The total grant date fair value of the market based RSUs was determined to be $2.2 million and is recognized over the requisite service period.

Changes in market based RSUs are as follows:

	Number of Market Based RSUs
Balance at December 31, 2021	13,317,712
Granted	949,026
Released	—
Cancelled	—
Balance at June 30, 2022	14,266,738

Stock Compensation Expense

The following table presents the impact of stock-based compensation expense on the consolidated statements of operations for the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	9,300	$	10,228	$	18,007	$	20,550
Selling, general, and administrative	45,541		42,442		90,362		82,386
Total stock-based compensation expense	$	54,841	$	52,670	$	108,369	$	102,936

As of June 30, 2022, total unrecognized compensation expense was as follows:

	Unrecognized Compensation Expense
Options	$	380
Market based RSUs	109,901
RSUs	168,843
Total unrecognized compensation expense at June 30, 2022	$	279,124

8. 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.

Beginning in 2022, the Tax Cuts and Jobs Act ("TCJA") requires taxpayers to capitalize certain research and development costs and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174. Previously, such costs could be deducted in the period they were incurred. This provision is not anticipated to impact our effective tax rate or result in any cash payments for our federal income taxes.

Income tax expense was immaterial for the three and six months ended June 30, 2022 and 2021 due to the cumulative tax losses.

24

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9. 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 June 30, 2022.

Regulatory and Governmental Investigations and Related Internal Review

In September 2020, a short seller 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 short-seller article (the “Internal Review”), and Kirkland & Ellis LLP promptly contacted the Division of Enforcement of the SEC 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. The Company and certain of its officers and employees also received subpoenas from the Staff of the Division of Enforcement as a part of a fact-finding inquiry.

The Company and our former executive chairman, Trevor Milton, also received grand jury subpoenas from the U.S. Attorney’s Office for the Southern District of New York (the “SDNY”) in September 2020. Later that same month, 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 is committed to cooperating fully with the Staff of the Division of Enforcement and the SDNY. 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 last such production of information was made in August 2021. The Company will continue to comply with future requests of the Staff of the Division of Enforcement and the SDNY.

By order dated December 21, 2021, the Company and the SEC reached a settlement arising out of the SEC’s investigation of the Company. Under the terms of the settlement, without admitting or denying the SEC’s findings, the Company agreed to cease and desist from future violations of the Securities Exchange Act of 1934 (the "Exchange Act") and Rules 10b-5 and 13a-15(a) thereunder and Section 17(a) of the Securities Act of 1933 (the "Securities Act"); to certain voluntary undertakings; and to pay a $125 million civil penalty, to be paid in five installments over two years.The first $25 million installment was paid at the end of 2021 and the remaining installments are to be paid semiannually through 2023. The Company previously reserved the full amount of the settlement in the quarter ended September 30, 2021, as disclosed in the Company’s quarterly report on Form 10-Q for such quarter, filed with the SEC on November 4, 2021. The SEC’s cease and desist order is available on the SEC’s website. In July 2022, the Company and SEC agreed to an alternative payment plan with the first two payments of $5 million to be paid in July 2022 and December 2022. The July 2022 payment has been made by the Company. The remainder of the payment plan is subject to determination. As of June 30, 2022 Company has reflected the remaining liability of $75 million in accrued expenses and other current liabilities and $25 million in other-long term liabilities on the consolidated balance sheets.

The legal and other professional costs the Company incurred during the three and six months ended June 30, 2022 in connection with the Internal Review and disclosed elsewhere in this Report include approximately $9.0 million and $19.6 million, respectively, expensed for Mr. Milton’s attorneys’ fees under his indemnification agreement with the Company. During the three and six months ended June 30, 2021 the Company expensed $3.2 million and $6.2 million, respectively for Mr. Milton's attorneys' fees under his indemnification agreement with the Company. As of June 30, 2022 and December 31, 2021, the Company accrued approximately $21.4 million and $22.7 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 its continued cooperation with the Staff of the Division of Enforcement and the SDNY in fiscal year 2022, which will be expensed as incurred and which could be significant in the periods in which they are recorded.

25

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On July 29, 2021, the U.S. Attorney for the SDNY announced the unsealing of a criminal indictment charging Mr. Milton with two counts of securities fraud and one count of wire fraud. That same day, the SEC announced charges against Mr. Milton for alleged violations of federal securities laws. The Company has been informed that the SDNY investigation remains ongoing.

The Company cannot predict the ultimate outcome of the SDNY investigation 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 SDNY investigation 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 SDNY investigation will be completed, the final outcome of the SDNY investigation, what additional actions, if any, may be taken by the SDNY or by other governmental agencies, or the effect that such actions may have on the Company's business, prospects, operating results and financial condition, which could be material.

The SDNY investigation, 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 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 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 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

26

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 November 18, 2021, the Court appointed Nikola Investor Group II as Lead Plaintiff and appointed Pomerantz LLP and Block & Leviton LLP as co-lead counsel. On December 10, 2021, the Court issued a scheduling order pursuant to which Lead Plaintiff’s Amended Complaint was due January 24, 2022, Defendants’ deadline to answer or otherwise respond was set for March 10, 2022 and Plaintiffs’ deadline to file any responsive memorandum was set for April 11, 2022 with any reply from Defendants due by May 11, 2022. On January 24, 2022, Lead Plaintiffs filed the Consolidated Amended Class Action Complaint. On February 5, 2022, the Court granted the parties’ joint application for an extension of the deadline for Defendants to file an answer or move to dismiss until April 8, 2022, with Plaintiffs’ opposition due 30 days following the filing of a motion to dismiss, and any reply from Defendants due 30 days following Plaintiffs’ opposition. In accordance with the Court’s scheduling order, Defendants filed their motions to dismiss on April 8, 2022. On May 9, 2022, Plaintiffs filed their opposition to Defendants' motions to dismiss, and on June 8, 2022, Defendants filed their reply briefs. The Court has not yet ruled on the motions.

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. On December 17, 2021, Lead Plaintiff filed a motion to lift the PSLRA stay of discovery. On January 18, 2022, Nikola filed its opposition to Lead Plaintiff’s motion to lift the PSLRA stay of discovery and on January 25, 2022, Lead Plaintiff filed its reply. On April 21, 2022, the Court denied Plaintiffs' motion to lift the PSLRA stay.

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.

On January 7, 2022, Barbara Rhodes, a purported stockholder of the Company, filed her Verified Stockholder Derivative Complaint in Delaware Chancery Court captioned Rhodes v. Milton, et al. and Nikola Corp., C.A. No. 2022-0023-KSJM (the “Rhodes Action”). On January 10, 2022, Zachary BeHage and Benjamin Rowe (together, the “BeHage Rowe Plaintiffs”), purported stockholders of the Company, filed their Verified Shareholder Derivative Complaint in Delaware Chancery Court captioned BeHage v. Milton, et al. and Nikola Corp., C.A. No. 2022-0045-KSJM (the “BeHage Rowe Action”together with the Rhodes Action, the “Related Actions”). The Related Actions are against certain of the Company’s current and former directors and allege breach of fiduciary duties, insider selling under Brophy, aiding and abetting insider selling, aiding and abetting breach of fiduciary duties, unjust enrichment, and waste of corporate assets. On January 28, 2022, Rhodes and the BeHage Rowe Plaintiffs filed a stipulation and proposed order for consolidation of the Related Actions. The proposed order states that Defendants need not answer, move, or otherwise respond to the complaints filed in the Related Actions and contemplates that counsel for Plaintiffs shall file a consolidated complaint or designate an operative complaint within fourteen

27

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

days of entry of an order consolidating these actions and shall meet and confer with counsel for Defendants or any other party regarding a schedule for Defendants to respond to the operative complaint. The proposed order was granted by the Court on February 1, 2022. On February 15, 2022, Rhodes and the BeHage Rowe Plaintiffs filed a Verified Consolidated Amended Stockholder Derivative Complaint in the Related Actions (the “Amended Complaint”). On April 4, 2022, the parties filed a stipulation and proposed order, pursuant to which the parties to the Related Actions agreed that Defendants need not answer, move, or otherwise respond to certain counts of the Amended Complaint. In accordance with the Court-ordered stipulation, Defendants filed their motions to stay the remaining counts of the Amended Complaint on April 13, 2022. Plaintiffs filed their oppositions on May 4, 2022, and Defendants filed their replies on May 25, 2022. In a bench ruling following a telephonic oral argument on June 1, 2022, the Court granted Defendants' motions to stay the remaining counts of the Amended Complaint. The Court ordered the Defendants to submit a status report on October 31, 2022, or within three days of receipt of a decision on the motions to dismiss in the Shareholder Securities Litigation, whichever comes first, in which Defendants can request a continued stay of the Related Actions. On March 10, 2022, Michelle Brown and Crisanto Gomes (together, the “Brown & Gomes Plaintiffs”), purported stockholders of the Company, filed a Verified Shareholder Derivative Complaint in Delaware Chancery Court captioned Brown v. Milton, et al. and Nikola Corp., C.A. No. 2022-0223-KSJM (the “Brown & Gomes Action”). The Brown & Gomes Action is against certain of the Company’s current and former directors and alleges claims against those defendants for purported breaches of fiduciary duty and unjust enrichment. On March 14, 2022, the Brown & Gomes Plaintiffs notified the court in the Related Actions of their belief that the Brown & Gomes Action properly belongs as part of the consolidated Related Actions.

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 and retained independent counsel. 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’ 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. On January 14, 2022, Plaintiffs dismissed the action without prejudice.

28

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On January 19, 2022, Plaintiff Melissa Patel filed a complaint in Delaware Chancery Court seeking to compel inspection of books and records pursuant to Section 220 of the DGCL. On February 20, 2022, the parties filed a stipulation and proposed order of dismissal without prejudice, which the court granted on February 21, 2022.

Commitments and Contingencies

Coolidge Land Conveyance

In February 2019, the Company was conveyed 430 acres of land in Coolidge, Arizona, by Pinal Land Holdings ("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 fuel cell power module ("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 June 30, 2022, the Company accrued $20.9 million in "Accrued expenses and other current liabilities" and $10.5 million in "Other long-term liabilities" on the consolidated balance sheets.

10. NET LOSS PER SHARE

The following table sets forth the computation of the basic and diluted net loss per share for the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Net loss	$	(172,997)	$	(143,231)	$	(325,938)	$	(263,455)
Less: revaluation of warrant liability	—		—		—		—
Adjusted net loss	$	(172,997)	$	(143,231)	$	(325,938)	$	(263,455)
Denominator:
Weighted average shares outstanding, basic	425,323,391		394,577,711		420,266,181		393,390,377
Dilutive effect of common stock issuable from assumed exercise of warrants	—		—		—		—
Weighted average shares outstanding, diluted	425,323,391		394,577,711		420,266,181		393,390,377
Net loss per share:
Basic	$	(0.41)	$	(0.36)	$	(0.78)	$	(0.67)
Diluted	$	(0.41)	$	(0.36)	$	(0.78)	$	(0.67)

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.

29

NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Convertible Notes (on an as-converted basis)	22,872,040	—	22,872,040	—
Outstanding warrants	760,915	760,915	760,915	760,915
Stock options, including performance stock options	28,683,739	29,559,690	28,683,739	29,559,690
Restricted stock units, including market based RSUs	32,262,297	23,262,974	32,262,297	23,262,974
Total	84,578,991	53,583,579	84,578,991	53,583,579

11. SUBSEQUENT EVENTS

Settlement of Price Differential

In accordance with the Amended MIPA, the second price differential with the WVR Sellers was settled on July 1, 2022, for $6.6 million.

Proposed Business Combination

The Company entered into an Agreement and Plan of Merger and Reorganization dated July 30, 2022 (the "Merger Agreement") with Romeo Power, Inc. ("Romeo") and J Purchaser Corp (“Purchaser”), a wholly-owned subsidiary of the Company. Headquartered in Cypress, California, Romeo is an energy storage technology company focused on designing and manufacturing lithium-ion battery modules and packs for commercial vehicle applications. Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Purchaser will commence an exchange offer (the “Offer”) to acquire all of the issued and outstanding shares of Romeo common stock for the right to receive 0.1186 of a share (the "Exchange Ratio") of the Company's common stock, representing an equity value of approximately $144 million based on Romeo's July 29, 2022 closing share price. At the effective time of the Merger (the “Effective Time”), each then-outstanding share of Romeo common stock, other than Romeo common stock held in treasury, by the Company, Purchaser, Romeo or their respective subsidiaries immediately before the Effective Time, will be cancelled and converted into the right to receive a number of shares of Company common stock equal to the Exchange Ratio

The Merger Agreement provides that at the Effective Time, (i) each outstanding option (whether or not vested or exercisable) relating to Romeo common stock will be cancelled and the holders will not be entitled to receive any consideration, (ii) each restricted stock unit and performance stock unit relating to Romeo common stock will be assumed by the Company and converted into a corresponding award with respect to Company common stock (with the number of shares subject to such award equitably adjusted based on the Exchange Ratio) (all performance-based vesting conditions shall be deemed satisfied at the greater of the “earned” or “target” performance levels) and (iii) each Romeo warrant exercisable for Romeo common stock will be assumed by the Company and converted into a corresponding warrant denominated in shares of Company common stock (with the number of warrants and exercise price being adjusted based on the Exchange Ratio). The Merger Agreement may be terminated by the Company or Romeo in accordance with its terms and provides for the payment of termination fees and reimbursement of expenses under certain circumstances.

The transaction is expected to be completed by the end of October 2022, subject to tender by Romeo's stockholders of shares representing a majority of the outstanding Romeo common stock, and customary closing conditions, including regulatory approval, with preliminary purchase price accounting reflected in the Company's Form 10-K for the period ending December 31, 2022.

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NIKOLA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Concurrently with the execution of the Merger Agreement, Romeo and Romeo Systems, Inc., a Delaware corporation and a wholly-owned subsidiary of Romeo (“Romeo Systems”), entered into a Loan and Security Agreement (the “Loan Agreement”) with the Company as the lender. The Loan Agreement provides for a liquidity support senior secured debt facility (the “Facility”) in an aggregate principal amount of up to $30.0 million (subject to certain incremental increases of up to $20.0 million), which shall be available for drawing subject to certain terms and conditions set forth in the Loan Agreement. Loans under The Facility may be made until the earlier of (a) six months from the date of the execution and delivery of the Merger Agreement and the Loan Agreement and (b) the date of the termination of the Merger Agreement. All amounts outstanding under the Facility will be due on terminates upon the earlier of (a) the date that is the six-month anniversary of the termination of the Merger Agreement and (b) July 30, 2023, subject to acceleration upon the occurrence of certain events set forth in the Facility Loan Agreement. Interest will be payable on borrowings under the Facility at daily SOFR plus 8.00%

Romeo’s obligations under the Loan Agreement are secured by substantially all personal property assets of Romeo and Romeo Systems, subject to certain customary exclusions.

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

This report contains forward-looking statements and can be identified by the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” "will", and similar expressions. These are statements that relate to future periods and include our financial and business performance; expected timing with respect to the expansion 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 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; 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; our expectations regarding the potential closing of our recently announced proposed acquisition of Romeo Power, Inc. (“Romeo”) and the potential benefits of the proposed transaction; 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; supply chain constraints; the impact of inflation; 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; the ability to close our proposed acquisition of Romeo on a timely basis or at all; our ability to achieve the intended benefits of our proposed acquisition of Romeo; 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 included in our Annual Report on Form 10-K for the year ended December 31, 2021.

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

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trucking sector. The Energy business unit is primarily developing a hydrogen fueling ecosystem and charging stations to support our BEV and FCEV customers.

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:

•    commercialize our heavy-duty trucks and other products;

•    expand and maintain manufacturing facilities and equipment;

•    invest in servicing our vehicles under warranty including repairs and service parts

•    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

On August 1, 2022, we entered into a definitive merger agreement with Romeo (NYSE: RMO) in an all-stock transaction. The proposed merger values 100% of Romeo’s equity at approximately $144 million based on Romeo's July 29, 2022 closing share price. The transaction is expected to be completed by the end of October 2022, subject to tender by Romeo's stockholders of shares representing a majority of the outstanding Romeo common stock, and customary closing conditions, including regulatory approval. The merger is expected to allow us to secure control of critical battery pack engineering and production to meet internal demand.

Romeo is headquartered in Cypress, California, and manufactures battery modules, packs, and battery management systems ("BMS") for commercial vehicle applications. As Romeo's largest production customer, we expect the proposed merger will allow for significant operational improvements and cost reductions in our battery pack production. The addition of Romeo's battery and BMS engineering capabilities are also expected to support accelerated product development and improved customer experience. See Note 11 to our Unaudited Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

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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.”

We started serial production at our Coolidge manufacturing facility in March 2022 and began sales of Tre BEV trucks in the second quarter of 2022. In the second quarter, we produced 50 Tre BEV trucks and shipped 48 Tre BEV trucks to our dealer network.

We continue to experience supply chain shortages and related challenges, including battery cells and packs, integrated circuits, vehicle control chips, and displays. While the availability of certain vital components has somewhat improved, increased commodity pricing on battery cells and other components is putting significant strain on the supply chain system. These factors has delayed and may continue to cause delays in the availability of Nikola Tre BEV trucks and impact our ability to generate revenue. Furthermore, there is no guarantee we can successfully pass through increased component costs to customers and how that may impact their decision to purchase our trucks.

We sell our trucks to dealers in our network and rely on the dealers to sell them to end users. As we recently began sales of our Tre BEV, we may experience delays in receiving additional purchase orders from our dealers. The end users of the Tre BEV will need to continuously assess their charging capacity and may need to build or expand infrastructure prior to ordering or receiving trucks from the dealers. Dealers have and may continue to experience delays in receiving proceeds from the California Hybrid Zero Emission Truck and Voucher Incentive Program ("HVIP"), and may experience delays receiving proceeds from the New York Truck Voucher Incentive Program ("NYTVIP"), which many of them are leveraging for the first time. To qualify for the HVIP and NYTVIP, the dealers are required to complete extensive training, initiate and complete applications for each sales order, and complete the voucher redemption process upon delivery to the end user. In addition, there may be delays in end user purchase orders due to general economic conditions, which in turn could delay dealer purchase orders issued to us.

We also require substantial additional capital to develop our products, including the Tre FCEV trucks, 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.

Basis of Presentation

Currently, we conduct business through one operating segment. See Note 2 in our Annual Report on Form 10-K for the year ended December 31, 2021 for more information.

Components of Results of Operations

Revenues

Truck sales: During the three and six months ended June 30, 2022, our truck sales were derived from deliveries of our Tre BEV trucks.

Service and other: We began generating sales from deliveries of Mobile Charging Trailers ("MCTs") to dealers and customers in the first quarter of 2022.

Cost of Revenues

Truck sales: Cost of revenue includes direct parts, material and labor costs, manufacturing overhead, including amortized tooling costs and depreciation of our Coolidge manufacturing facilities, shipping costs and reserves for estimated warranty expenses and inventory write-downs.

Service and other: Cost of revenues related to MCT sales primarily include direct materials, outsourced manufacturing services, and fulfillment costs.

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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. With the start of commercial production of the Tre BEV, manufacturing costs, including labor and overhead, as well as inventory-related expenses related to the Tre BEV trucks, and related facility costs, are no longer recorded in research and development but are reflected in cost of revenues.

During the three and six months ended June 30, 2022, our research and development expenses have primarily been incurred in the development of our FCEV trucks.

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.

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 Expense, net

Interest expense consists of interest on our debt, financing obligation and finance lease liabilities. Interest income consists primarily of interest received or earned on our cash and cash equivalents balances.

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, net consists primarily of other miscellaneous non-operating items, such as government grants, subsidies, merchandising, revaluation gains and losses on derivatives, 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 net gains and losses from equity method investments.

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Results of Operations

Comparison of Three Months Ended June 30, 2022 to Three Months Ended June 30, 2021

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

	Three Months Ended June 30,				$		%
	2022		2021		Change		Change
	(in thousands, except share and per share data)
Revenues:
Truck sales	$	17,383	$	—	$	17,383	NM
Service and other	751		—		751		NM
Total revenues	18,134		—		18,134		NM
Cost of revenues:
Truck sales	46,781		—		46,781		NM
Service and other	610		—		610		NM
Total cost of revenues	47,391		—		47,391		NM
Gross loss	(29,257)		—		(29,257)		NM
Operating expenses:
Research and development	63,106		67,726		(4,620)		(6.8)%
Selling, general, and administrative	79,868		70,672		9,196		13.0%
Total operating expenses	142,974		138,398		4,576		3.3%
Loss from operations	(172,231)		(138,398)		(33,833)		24.4%
Other income (expense):
Interest expense, net	(2,808)		(92)		(2,716)		NM
Revaluation of warrant liability	3,341		(2,511)		5,852		(233.1)%
Other income (expense), net	(27)		(1,102)		1,075		NM
Loss before income taxes and equity in net loss of affiliates	(171,725)		(142,103)		(29,622)		20.8%
Income tax expense	2		2		—		NM
Loss before equity in net loss of affiliates	(171,727)		(142,105)		(29,622)		20.8%
Equity in net loss of affiliates	(1,270)		(1,126)		(144)		12.8%
Net loss	$	(172,997)	$	(143,231)	$	(29,766)	20.8%
Net loss per share:
Basic	$	(0.41)	$	(0.36)	$	(0.05)	NM
Diluted	$	(0.41)	$	(0.36)	$	(0.05)	NM
Weighted-average shares outstanding:
Basic	425,323,391		394,577,711		30,745,680		NM
Diluted	425,323,391		394,577,711		30,745,680		NM

Revenues

Revenues were $18.1 million during the three months ended June 30, 2022, consisting of $17.4 million in truck sales driven by sales of Tre BEV trucks and $0.8 million in service and other sales driven by deliveries of MCT units.

Cost of Revenues

Truck Sales

Cost of revenues related to truck sales were $46.8 million during the three months ended June 30, 2022. Truck cost of revenues includes direct materials, freight and duties for transportation of purchased parts, manufacturing labor and overhead including Coolidge plant facility costs and depreciation, inventory write-downs for net realizable value and obsolescence, and reserves for estimated warranty expenses. Given our inventory is stated at net realizable value, which is currently lower than the actual cost, any overhead including freight is expensed in the period incurred as opposed to being capitalized into inventory.

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With the start of production late in first quarter of 2022, we have experienced high fixed costs due to low volumes produced and have relied on expedited air freight to meet production deadlines. These costs are expected to decrease as we increase volumes and mature our supply chain logistics.

Service and other

Cost of revenues related to service and other revenue were $0.6 million during the three months ended June 30, 2022, driven by direct materials, outsourced services, and fulfillment costs related to the MCTs delivered in the second quarter of 2022.

Research and Development

Research and development expenses decreased by $4.6 million, or 6.8%, from $67.7 million during the three months ended June 30, 2021 to $63.1 million during the three months ended June 30, 2022. The decrease was primarily due to a decrease in outside development of $16.1 million, partially offset by an increase in personnel expenses of $7.0 million driven by growth in our in-house engineering headcount and an increase of $3.9 million in purchased materials for FCEV builds.

Selling, General, and Administrative

Selling, general, and administrative expenses increased by $9.2 million, or 13.0%, from $70.7 million during the three months ended June 30, 2021 to $79.9 million during the three months ended June 30, 2022. The increase was driven by an increase in personnel expense of $3.3 million and stock based compensation of $3.2 million due to an increase in headcount, and an increase in legal expenses of $3.0 million. These increases were partially offset by a decrease of $2.6 million related to the non-cash commitment share issuance costs related to the equity line of credit with Tumim Stone Capital LLC during the second quarter of 2021.

Interest Expense, net

Interest expense, net increased by $2.7 million from $0.1 million during the three months ended June 30, 2021 to $2.8 million during the three months ended June 30, 2022. Interest expense increased due to interest on our Convertible Notes, Promissory Note, Collateralized Promissory Note and financing obligation.

Revaluation of Warrant Liability

The revaluation of warrant liability increased $5.9 million, from a $2.5 million loss during the three months ended June 30, 2021 to a $3.3 million gain during the three months ended June 30, 2022, resulting from changes in fair value of our warrant liability.

Other Income (Expense), net

Other income, net increased by $1.1 million from $1.1 million net expense during the three months ended June 30, 2021 to $0.03 million net expense during the three months ended June 30, 2022. The increase is primarily related to government grant income and gains from foreign currency translation. These increases were partially offset by a loss on revaluation of derivatives and write off of unamortized debt issuance costs on the Promissory Note.

Income Tax Expense

Income tax expense was immaterial for the three months ended June 30, 2022 and 2021. 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 increased by $0.1 million, from $1.1 million for the three months ended June 30, 2021 to $1.3 million for the three months ended June 30, 2022. The increase was driven by additional losses in the current period related to Nikola Iveco Europe GmbH and WVR.

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Comparison of Six Months Ended June 30, 2022 to Six Months Ended June 30, 2021

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

	Six Months Ended June 30,				$		%
	2021		2020		Change		Change
	(dollar amounts in thousands)
Revenues:
Truck sales	$	17,383	$	—	$	17,383	NM
Service and other	2,638		—		2,638		NM
Total revenues	20,021		—		20,021		NM
Cost of revenues:
Truck sales	46,781		—		46,781		NM
Service and other	2,066		—		2,066		NM
Total cost of revenues	48,847		—		48,847		NM
Gross loss	(28,826)		—		(28,826)		NM
Operating expenses:
Research and development	137,663		122,889		14,774		12.0%
Selling, general, and administrative	157,051		136,099		20,952		15.4%
Total operating expenses	294,714		258,988		35,726		13.8%
Loss from operations	(323,540)		(258,988)		(64,552)		24.9%
Other income (expense):
Interest expense, net	(3,019)		(101)		(2,918)		NM
Revaluation of warrant liability	2,907		(1,560)		4,467		(286.3)%
Other income (expense), net	1,806		(883)		2,689		NM
Loss before income taxes and equity in net loss of affiliate	(321,846)		(261,532)		(60,314)		23.1%
Income tax expense	2		3		(1)		NM
Loss before equity in net loss of affiliate	(321,848)		(261,535)		(60,313)		23.1%
Equity in net loss of affiliate	(4,090)		(1,920)		(2,170)		113.0%
Net loss	$	(325,938)	$	(263,455)	$	(62,483)	23.7%
Net loss per share attributable to common stockholders:
Basic	$	(0.78)	$	(0.67)	$	(0.11)	NM
Diluted	$	(0.78)	$	(0.67)	$	(0.11)	NM
Weighted-average shares outstanding:
Basic	420,266,181		393,390,377		26,875,804		NM
Diluted	420,266,181		393,390,377		26,875,804		NM

Revenues

Revenues were $20.0 million during the six months ended June 30, 2022, consisting of $17.4 million in truck sales driven by sales of Tre BEV trucks and $2.6 million in service and other sales driven by deliveries of MCT units.

Cost of Revenues

Truck sales

Cost of revenues related to truck sales were $46.8 million during the six months ended June 30, 2022. Truck cost of revenues includes direct materials, freight and duties for transportation of purchased parts, manufacturing labor and overhead including Coolidge plant facility costs and depreciation, inventory write-downs for net realizable value and obsolescence, and reserves for estimated warranty expenses. Given our inventory is stated at net realizable value, which is currently lower than the actual cost, any overhead including freight is expensed in the period incurred as opposed to being capitalized into inventory.

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With the start of production late in first quarter of 2022, we have experienced high fixed costs due to low volumes produced and have relied on expedited air freight to meet production deadlines. These costs are expected to decrease as we increase volumes and mature our supply chain logistics.

Service and other

Cost of revenues related to service and other revenue were $2.1 million during the six months ended June 30, 2022, driven by direct materials, outsourced services, and fulfillment costs related to the MCTs deliveries.

Research and Development

Research and development expenses increased by $14.8 million, or 12.0%, from $122.9 million during the six months ended June 30, 2021 to $137.7 million during the six months ended June 30, 2022. This increase was primarily due to increased personnel costs of $17.9 million driven by growth in our in-house engineering headcount. We also incurred $13.9 million in higher spend on prototype parts and components and associated freight and duties, related to Tre BEV and FCEV prototype builds. Additional increases were driven by travel, professional services and tooling, as well as higher depreciation and occupancy costs. These increases were partially offset by a decrease of $19.8 million in outside development and a decrease of $3.2 million in stock based compensation.

Selling, General, and Administrative

Selling, general, and administrative expenses increased by $21.0 million, or 15.4%, from $136.1 million during the six months ended June 30, 2021 to $157.1 million during the six months ended June 30, 2022. The increase was primarily related to higher personnel costs of $8.4 million and stock based compensation expense of $8.0 million driven by growth in headcount. Additionally, there was an increase in general corporate expenses related to professional services, marketing, legal expenses, travel, business insurance and freight, partially offset by the non-cash commitment share issuance costs related to the equity line of credit with Tumim Stone Capital LLC during the second quarter of 2021.

Interest Income (Expense), net

Interest expense, net increased by $2.9 million from $0.1 million during the three months ended June 30, 2021 to $3.0 million during the three months ended June 30, 2022. Interest expense increased due to interest on our Convertible Notes, Promissory Note, Collateralized Promissory Note and financing obligation.

Revaluation of Warrant Liability

The revaluation of warrant liability increased $4.5 million, from a $1.6 million loss during the six months ended June 30, 2021 to a $2.9 million gain during the six months ended June 30, 2022 resulting from changes in fair value of our warrant liability.

Other Income (Expense), net

Other income, net increased by $2.7 million from $0.9 million net expense during the three months ended June 30, 2021 to $1.8 million net income during the three months ended June 30, 2022. The increase is primarily related to government grant income and gains from foreign currency translation. These increases were partially offset by a loss on revaluation of derivatives and write off of unamortized debt issuance costs on the Promissory Note.

Income Tax Expense

Income tax expense was immaterial for the six months ended June 30, 2022 and 2021. 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 increased by $2.2 million, from $1.9 million for the three months ended June 30, 2021 to $4.1 million for the three months ended June 30, 2022. The increase was driven by additional losses in the current period related to Nikola Iveco Europe GmbH and WVR.

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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.

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 six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Net loss	$	(172,997)	$	(143,231)	$	(325,938)	$	(263,455)
Interest expense, net	2,808		92		3,019		101
Income tax expense	2		2		2		3
Depreciation and amortization	6,565		1,905		9,676		3,710
EBITDA	(163,622)		(141,232)		(313,241)		(259,641)
Stock-based compensation	54,841		52,670		108,369		102,936
Revaluation of financial instruments	196		2,511		192		1,560
Equity in net loss of affiliates	1,270		1,126		4,090		1,920
Regulatory and legal matters (1)	12,970		11,019		27,092		25,885
Adjusted EBITDA	$	(94,345)	$	(73,906)	$	(173,498)	$	(127,340)

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

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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands, except share and per share data)
Net loss	$	(172,997)	$	(143,231)	$	(325,938)	$	(263,455)
Stock-based compensation	54,841		52,670		108,369		102,936
Revaluation of financial instruments	196		2,511		192		1,560
Regulatory and legal matters(1)	12,970		11,019		27,092		25,885
Non-GAAP net loss	$	(104,990)	$	(77,031)	$	(190,285)	$	(133,074)
Non-GAAP net loss per share:
Basic	$	(0.25)	$	(0.20)	$	(0.45)	$	(0.34)
Diluted	$	(0.25)	$	(0.20)	$	(0.45)	$	(0.34)
Weighted average shares outstanding:
Basic	425,323,391		394,577,711		420,266,181		393,390,377
Diluted	425,323,391		394,577,711		420,266,181		393,390,377

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

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, a private placement with investors (the "PIPE"), proceeds from the Tumim Purchase Agreements, and redemption of warrants, and debt. As of June 30, 2022, our principal sources of liquidity were our cash and cash equivalents in the amount of $441.8 million. During the second quarter of 2022, we completed a private placement of $200.0 million aggregate principal amount of unsecured 8.00% / 11.00% convertible senior PIK toggle notes (the "Convertible Notes"), which will mature on May 31, 2026. Net proceeds from the issuance were $183.2 million.

During 2021, we entered into a common stock purchase agreement with Tumim (the "First Tumim Purchase Agreement") allowing us to issue shares of our common stock to Tumim for proceeds of up to $300.0 million. During the three and six months ended June 30, 2022, we sold 13,604,600 and 17,248,244 shares of common stock, respectively, for proceeds of $96.3 million and $123.7 million, respectively, under the terms of the First Tumim Purchase Agreement. As of June 30, 2022 we have issued in aggregate 31,461,742 shares of common stock to Tumim under the terms of the First Tumim Purchase Agreement for gross proceeds of $287.5 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 First Tumim Purchase Agreement. As of June 30, 2022, there were 3,420,990 registered shares remaining and a remaining commitment available under the First Tumim Purchase Agreement of $12.5 million.

Additionally, during 2021, we entered into a second common stock purchase agreement with Tumim (the "Second Tumim Purchase Agreement" and, together with the First Tumim Purchase Agreement, the "Tumim Purchase Agreements") allowing us to issue shares of our common stock to Tumim for proceeds of up to an additional $300.0 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 Tumim Purchase Agreement and termination of the First Tumim Purchase Agreement. As of June 30, 2022, we have not sold any shares of common stock to Tumim under the terms of the Second Tumim Purchase Agreement with 28,790,787 registered shares remaining and a remaining commitment of $300.0 million available.

Short-Term Liquidity Requirements

As of June 30, 2022, our current assets were $545.4 million consisting primarily of cash and cash equivalents of $441.8 million, and our current liabilities were $253.6 million primarily comprised of accrued expenses and accounts payables.

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

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

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

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

•revenue received from sales of our BEV trucks;

•the costs of expanding and maintaining our manufacturing facility and equipment;

•our warranty claims experience should actual warranty claims differ significantly from estimates;

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

•the timing and the costs involved in bringing our vehicles to market;

•the development and deployment of our hydrogen fueling network;

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

•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.

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 SEC. For the three and six months ended June 30, 2022, there have been no other material changes to our significant contractual obligations as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

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The following table provides a summary of cash flow data:

	Six Months Ended June 30,
	2022		2021
	(in thousands)
Net cash used in operating activities	$	(273,811)	$	(125,974)
Net cash used in investing activities	(90,343)		(89,587)
Net cash provided by (used in) financing activities	371,137		(1,023)

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.

Net cash used in operating activities was $273.8 million for the six months ended June 30, 2022. The most significant component of our cash used during this period was net loss of $325.9 million, which included non-cash expenses of $108.4 million related to stock-based compensation, $9.7 million in depreciation and amortization, inventory write downs of $10.9 million, other non-cash charges of $7.0 million and net cash outflows of $83.8 million from changes in operating assets and liabilities primarily driven by an increase in inventory and prepaid expenses and other current assets.

Net cash used in operating activities was $126.0 million for the six months ended June 30, 2021. The most significant component of our cash used during this period was a net loss of $263.5 million, which included non-cash charges of $102.9 million related to stock-based compensation, $27.7 million expense for in-kind services, other non-cash charges of $10.8 million and net cash outflows of $4.0 million from changes in operating assets and liabilities primarily driven by increases in long-term deposits and prepaid expenses and other current assets, partially offset by an increase in accounts payable and accrued expenses.

Cash Flows from Investing Activities

We continue to experience negative cash flows from investing activities as we expand our business and 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 expand 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 June 30, 2022, we anticipate our capital expenditures for the remainder of fiscal year 2022 to be between $229 million to $239 million, of which a significant portion is related to the expansion of our truck manufacturing facility and purchases of related equipment in Coolidge, Arizona.

Net cash used in investing activities was $90.3 million for the six months ended June 30, 2022, which was primarily due to $67.3 million in purchases of and deposits for capital equipment, costs of expansion for our Coolidge manufacturing facility and supplier tooling, $23.0 million in cash contributions to our investments in affiliates.

Net cash used in investing activities was $89.6 million for the six months ended June 30, 2021, which was primarily due to $64.8 million in costs of expansion 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.

Cash Flows from Financing Activities

Net cash provided by financing activities was $371.1 million for the six months ended June 30, 2022, which was due to proceeds from the issuance of the Convertible Notes, net of debt issuance costs of $183.5 million, proceeds from the Tumim Purchase Agreements of approximately $123.7 million, proceeds from the issuance of the Collateralized Note of $50.0 million, proceeds from the sale leaseback of our headquarters for $38.6 million, proceeds from the exercises of stock options of $0.6 million, offset by the repayment of our promissory note for $25.0 million and other finance charges of $0.2 million.

Net cash used by financing activities was $1.0 million for the six months ended June 30, 2021, which was primarily due to $4.1 million term note repayment, partially offset by the exercise of stock options of $3.8 million.

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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 and market-based restricted stock units, the valuation of warrant liabilities, derivative liabilities, estimates related to our lease assumptions, contingent liabilities, including litigation reserves, and inventory valuation. 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 six months ended June 30, 2022. For a full discussion of these estimates and policies, see "Critical Accounting Estimates" in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.

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 June 30, 2022 and December 31, 2021, we had cash and cash equivalents of $441.8 million and $497.2 million, respectively. As of December 31, 2021, the cash and cash equivalents balance consisted 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. As of June 30, 2022, none of our cash and cash equivalents balance was invested in interest-bearing money market accounts.

Foreign Currency Risk

For the three months ended June 30, 2022 and 2021, we recorded a gain of $3.0 million and a loss of $0.2 million, respectively, for foreign currency translation. For the six months ended June 30, 2022 and 2021, we recorded a gain of $3.9 million and a loss of $0.1 million, 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 June 30, 2022, 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.

Changes in Internal Control over Financial Reporting

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 June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see Note 9, 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 for the year ended December 31, 2021, 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 $690.4 million and $325.9 million for the year ended December 31, 2021 and for the six months ended June 30, 2022, respectively, and have an accumulated deficit of approximately $1.6 billion from the inception of Nikola Corporation, a Delaware corporation, or Legacy Nikola, prior to the merger with VectoIQ, through June 30, 2022. 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 until the second quarter of 2022 for our BEV truck and the second half of 2023 for our Tre FCEV truck 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 materials 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 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 expect to continue to 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

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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 cost-efficiently develop our hydrogen fueling 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 and a novel business plan. 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 public market or the perception that these sales might occur, including pursuant to our existing equity lines of credit, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.

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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;

•establishing our hydrogen fueling capabilities; 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 through our dealer network, 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 a short-seller, or the short-seller article. The SEC issued subpoenas to our directors on September 30, 2020. In addition, Nikola and Trevor R. Milton, our founder and former executive chairman, also received grand jury subpoenas from the U.S. Attorney’s Office for the SDNY and the N.Y. County District Attorney’s Office in September 2020. On July 29, 2021, the U.S. Attorney for the SDNY announced the unsealing of a criminal indictment charging Mr. Milton with two counts of securities fraud and one count of wire fraud. That same day, the SEC 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 short-seller article. The total cost associated with these matters will depend on many factors, including the duration of these matters and any related finding.

By order dated December 21, 2021, we and the SEC reached a settlement arising out of the SEC’s investigation of the Company. Under the terms of the settlement, without admitting or denying the SEC’s findings, we agreed to cease and desist from future violations of the Exchange Act, and Rules 10b-5 and 13a-15(a) thereunder and Section 17(a) of the Securities Act; to certain voluntary undertakings; and to pay a $125 million civil penalty, to be paid in five installments over two years. The first $25 million installment was paid at the end of 2021 and the remaining installments are to be paid semiannually through 2023. In July 2022, we and the SEC agreed to an alternative payment plan with the first two payments of $5 million to be paid in July 2022 and December 2022. The July 2022 payment has been made. The remainder of the payment plan is subject to determination.

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 9, 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 for the year ended December 31, 2021, 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 9, 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 for the year ended December 31, 2021 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 CNHI and Iveco, which commenced operations in the fourth quarter of 2020 and started trial production in the second quarter of 2021, and 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;

•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;

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•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, including ongoing supply constraints and shortages; 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