Published on September 3rd, 2019 | by Kyle Field0
Nikola Adds European Manufacturing Partner In New $1 Billion Series D Funding
September 3rd, 2019 by Kyle Field
CNH Industrial N.V. announced a new $250 million investment into the Nikola Motor Company as the lead investor in a new Series D funding round. The investment round comes as Nikola works to integrate a single lease plan for its vehicles that roll all vehicle, service, maintenance, and fuel costs into a single lease price in a bid to offer early adopters assurance of predictable prices and payouts for their fleets.
The investment brings CNHI on as a partner in the push to get Nikola’s three heavy duty trucks to market, bringing the might of its commercial vehicle and powertrain arms to bear. In total, Nikola expects to raise more than $1 billion in the Series D funding round, granting 25% ownership to the new investors and partners along the way.
“The increasing focus on the recognition that there needs to be fundamental reduction in automotive emissions is driving our industry to rapidly seek advanced technological solutions. IVECO is now ideally placed to offer customers an even wider range of transport solutions including natural gas, electric and fuel-cell powered vehicles,” said Hubertus Mühlhäuser, Chief Executive Officer, CNH Industrial. “Nikola’s choice of IVECO as its strategic partner is testament to our internationally recognized excellence in heavy duty trucks and alternative powertrain technologies.”
The news comes as CNH Industrial announced that it will spin off its commercial vehicle division, IVECO, as a separate business. Extricating IVECO from the CNH Industrial conglomerate comes as part of a larger strategy at parent company Exor N.V. to spin off individual brands to generate a higher valuation of the total company. Along with CNHI’s powertrain division, FPT Industrial, IVECO will throw its engineering and manufacturing expertise behind Nikola in the push to get Nikola’s three fuel cell and battery electric heavy truck platforms ready for manufacturing.
Work will happen under a new European joint venture that will bring together leaders in fuel-cells, e-axles, inverters, independent suspension, on-board hydrogen fuel storage, over-the-air software update functionality, infotainment, vehicle controls, vehicle-to-station communication protocols, power electronics, and access to a hydrogen fueling network.
The new partnership takes the veil off the interest in hydrogen from the fossil fuel industry, confirming that it sees hydrogen and the fuel cells that use it as the next step forward in fueling station offerings. Both IVECO and FPT Industrial have experience in developing and deploying “alternative” powertrain technologies, with several decades of experience working with gas-based solutions.
Seeing these two legacy players in the industry taking steps to invest significant funds into next generation, zero emission hydrogen fuel cell technology is encouraging and bodes well for more robust powertrain and fueling system partnerships in the future. Nikola announced that it was partnering with Norwegian Nel to develop and deploy the vast network of fuel production and fueling stations required to support long haul fleets in North America and Europe. Even with Nel on board, there is a clear opportunity and perhaps even a need for Nikola to move faster to roll out the tremendous number of stations needed in the coming years.
The new joint venture will not only explore the next steps needed to bring hydrogen fuel cell vehicles to market, but also battery electric vehicles. Looking beyond vehicle development and manufacturing, Nikola plans to leverage IVECO’s significant European sales network to gain a foothold for its Euro-spec Nikola TRE truck.
“Nikola has the technology but needs a partner with a European network to achieve it in a timely manner. With CNH Industrial’s investment and partnership, we can now bring zero-emission trucks to Europe,” Trevor Milton, Chief Executive Officer, Nikola Corporation said. “It is exciting to see IVECO taking the lead in providing zero-emission solutions in Europe through its partnership with Nikola. By bringing CNH Industrial on board, we now have access to manufacturing know-how, purchasing power, validated truck parts, plant engineering and much more. Few will doubt our ability to commercialize a truck now.”