What happened

Nikola (NKLA 1.41%) stock plunged this week and was down nearly 33% through 11:30 a.m. ET Friday despite a positive opening on the last trading day of the week, according to data provided by S&P Global Market Intelligence. Shares of the electric and fuel cell vehicle maker have now lost more than 50% value in August so far.

Nikola announced some major updates over the last few days, and investors aren't happy.

So what

Earlier in the week, Nikola said it was selling $325 million in senior convertible notes -- debt instruments that can be converted into stock if the holders choose to do so. In other words, this fund-raising action makes further dilution of Nikola stock a possibility, which doesn't bode well for the holders of its existing shares.

There was an even bigger business update -- or rather, a warning -- from Nikola this week that spooked investors. Earlier in August, Nikola recalled around 209 Class 8 Tre battery electric vehicles (BEVs) after an investigation revealed that a coolant leak inside a battery pack may have caused a fire in a truck at the company's headquarters in June. Nikola also halted sales of the BEV trucks.

In a regulatory filing this week, Nikola said it could "incur significant expenses" because of the recall. Worse yet, Nikola stated there's no assurance the company "will be able to resume production" of its BEV trucks. That could hurt its brand image, business, cash flows, and financials.

Now what

Although Nikola stated the recall and hold on the sales of BEVs doesn't affect the production of its hydrogen fuel cell electric vehicles (FCEVs) since they have different battery pack designs, investors are right to be concerned.

The thing is, BEVs are Nikola's bread and butter for now; it began production of FCEVs only in late July and doesn't expect to deliver its first one before September. As of Aug. 4, the company had more than 200 reservations for FCEVs, but that won't help much if Nikola cannot resume sales of BEVs soon.

It's anyone's guess when Nikola will resume sales or how much the recall and disruption in BEV sales will cost the company. Nikola is already burning cash, and this week's news dashed any hopes investors had for a quick turnaround.