Nikola Corp. is losing an order to supply sanitation heavyweight Republic Services Inc. with 2,500 battery-electric garbage trucks, the latest setback for the electric-vehicle startup.

The Phoenix-based company said Wednesday that its order had been terminated due to a longer-than-expected development time and unexpected costs. Nikola and Republic had announced what they described as a binding contract in August, under which Republic said it would buy as many as 5,000 trucks.

“This was the right decision for both companies given the resources and investments required,” Mark Russell, Nikola’s chief executive officer, said in a a statement.

Shares of Nikola slid as much as 7.3 per cent in premarket trading after closing at US$16.83 on Tuesday.

General Motors Co. decided last month to downgrade its partnership with Nikola after the startup was hit by allegations of deception shortly after those two companies had announced plans to collaborate in September. Nikola has denied misleading investors.

In its statement Wednesday, Nikola confirmed plans to start deliveries in the U.S. of its first electric semi-truck in 2021 and start local production two years later at a plant currently under construction in Arizona.