Electric vehicle maker Nikola is moving its battery manufacturing operations to its Coolidge, Arizona facility as it looks to centralize its truck and battery assembly lines.
Battery manufacturing will now be housed in the same facility as Nikola's truck assembly, fuel cell power module assembly and battery module and pack production, the company announced last week.
The battery manufacturing lines are currently located in Cypress, California, which the company plans to finish relocating by early Q3 2023. The move includes a "detailed transition plan" to avoid production disruptions, according to a company press release.
"This decision reinforces our commitment to finding ways to optimize our cost structure and create a sustainable business model," Nikola President and CEO Michael Lohscheller said in a statement. "We remain focused on meeting our 2023 milestones, including pack and module production targets."
Nikola expects to maintain some battery engineering presence in California, focused on the development of the company's next generation battery management system software and modules. It will close the manufacturing site by July.
The EV maker hopes the move will help it save costs and boost production at a time when the company is struggling to meet delivery targets. Chief Financial Officer Kim Brady said on a November earnings call that the company would miss its goal of delivering 300 semi trucks in 2022.
Brady also noted during the same call that Nikola was actively lowering its 2023 BEV truck production targets amid a "highly unusual and challenging environment."
"We have determined that we are better off delivering fewer BEV trucks and preserving cash until the visibility becomes more apparent and the planned [bill of material] cost savings are achieved in 2023," Brady said on the call.
Nikola is hardly alone in its EV production problems. Rivian posted earlier this month that it also fell short of production targets last year, putting out 24,337 vehicles against an annual goal of 25,000.