Published on July 20th, 2020 | by Harry Stoltz0
Nikola Motor’s Trevor Milton Talks Fuel Cells, Trucking, & Short Sellers
July 20th, 2020 by Harry Stoltz
Trevor Milton is Nikola Motor’s Executive Chairman and Founder. A relatively young company, Nikola recently listed publicly on the NASDAQ stock exchange, and has garnered both excitement and scrutiny from investors and the media. Focusing mainly on the trucking industry, Nikola hopes to release a fleet of hydrogen fuel-cell powered semi trucks, along with a consumer pickup truck. I sat down with Trevor to talk about the progress that the company has made so far, and its plans for the future. Here are the answers I got.
Now is a very challenging time for any company to operate. How has Nikola been dealing with the pandemic?
Yeah, it’s pretty tough. This Covid thing has really affected everyone globally. If it only affected us, that would be one thing, and an easy thing to handle, but when it affects every one of your suppliers and your supply chain, it’s really tough. To give you an example, we have a factory in Ulm, Germany, which is coming online right now, and we’re building the first ever zero-emission semi truck. And that’s a semi truck that can go further than 300 miles, so that’s kind of the holy grail in zero-emissions. Everyone else has got 150–200 mile trucks, and that’s not going to do anyone any good. You need around 300 miles to really be able to get your load around a city, and get back, and not have to charge twice a day.
So, we have the first semi truck coming out in full production in Ulm Germany, and the coronavirus has shut down Germany, first of all, so you can’t really get in. Secondly, everyone is working from home. Third, all of the suppliers are working from home. So, now we’ve got this factory where we’re trying to get everything to come online and it’s been pretty tough. We’ve definitely had some delays in the supply chain, since our suppliers aren’t even open yet. Then, there’s employees in every company who have the coronavirus, so it’s spreading like crazy. Luckily, the mortality rate has gone way down, so the good news is that most of the people getting it only have mild symptoms.
Could you go into the focus on long-haul trucking for Nikola?
So, our main focus is on zero-emission semi trucks —the big semi trucks that move freight for companies like Walmart and Amazon, and things like that. These trucks have a total vehicle weight of 80,000 pounds, and Nikola is very unique in that we don’t only do battery electric, but we also do hydrogen electric as well. Contrary to what everyone thinks, batteries and hydrogen don’t compete. They’re completely different business models. Hydrogen is really focused on the heavy-duty long haul. So you’re going to be very weight sensitive, and you’re going to go very long distances. That’s where hydrogen makes a lot of sense. I usually tell people that with anything that goes over 300 miles, hydrogen makes much more sense than batteries. Anything under 300 miles, batteries make a lot more sense, because they can run cheaper. What people don’t understand is that, when you go over 300 miles, you need a lot more batteries, and that cuts into your payload. As soon as that happens, it cuts into your revenue. So, even if your energy was free with a battery electric vehicle, you would still lose money, because you still need to be able to haul freight. Freight is the most important aspect on every load. That’s why I tell everyone that there’s no one-size-fits-all solution.
What Nikola does that is very unique is that we don’t just build semi trucks. We’re actually an energy technology company. We focus primarily on the hydrogen infrastructure and the energy grid. That means that with every mile driven, Nikola makes a residual income. We sell the zero-emission hydrogen fuel with the truck. That’s important, because someone’s always going to build a cheaper truck than you. The key is to have control over the entire infrastructure, because that infrastructure allows you to sell fuel to your competitors and to your own vehicles. That’s what makes Nikola so unique.
How much of starting Nikola was related to moving away from fossil fuels?
When we first started, diesels were really only available. Tesla was barely coming out with cars, and no one thought that batteries would ever work. I had a lot of experience with natural gas, which was obviously a much less polluting gas than diesel was. So we started out with a natural gas hybrid, where the idea was that we would create a turbine natural gas engine that would run batteries, and would be very efficient. As we got into that, I realized that the emissions were just something that I did not want. And as fuel cells and batteries have advanced, we have been able to get away from the turbine and go straight to a fuel cell zero-emission truck. So, it was always about reducing emissions, but the problem was that there was no way to do that when we started. We pivoted to the fuel cells as soon as that technology was available, and now we’re the leaders in fuel cell trucks around the world.
I was hoping you could talk a little bit about the Badger, Nikola’s consumer-focused pickup truck.
So, we built the semi trucks for the revenue. We built the badger to connect to the consumer. Most consumers will never own a semi truck, so we really wanted a product to connect to everyone in America. Not everyone drives a pickup truck, but everyone sees them. The pickup truck touches almost everyone.
The badger is also completely electric, with two options: a battery electric version, and a fuel cell electric version. It’s the exact same powertrain, except that the fuel cell gives you an extra 300 miles. The battery electric version goes 300 miles, and the fuel cell version goes another 300 miles. It’s very similar to the semi trucks in that it’s the same technology. We spent one billion dollars on the semi truck program, and we took all that technology and put in into a pickup truck, which is now the most advanced pickup in the world.
That’s going to be unveiled at Nikola World on December 3rd, 4th, and 5th of this year, and the entire world will get to see the Badger for real. This thing has 906 horsepower, and 980 ft-lb of torque, so it’s almost as fast as the fastest Tesla ever made, but you have to remember that it has a lot more mass. 0–60 in under 2.9 seconds will beat almost every supercar out there in a pickup truck.
There’s been a lot of drama between many in regards to what Nikola has shown off so far. Could you speak on that?
Here’s the fun thing. They all fall into a trap. When you become a master marketer, which is what you have to be to become a multibillion dollar company, you have to lure all the trolls in. All these naysayers and trolls, even some of your competition, will start to attack you and tell you that your vehicles are fake and they’re not real. And we let them do that continually, and what it did was build up a bunch of drama. So we built up all this tension. Yesterday, I told my guys to get the truck ready, and we took the semi truck, and ran it around the property. And then I started running alongside it so they could actually all see that it was real. And what it did was it brought in tens of thousands of new followers to Nikola. All of the trolls instantly went quiet, and the stock went crazy. This is marketing 101, and they fell right into it, and I kind of like it. [Note that this interview was conducted approximately a week ago.]
Do you have a timeline for the Badger?
So, Nikola World is December 3rd, 4th, and 5th, and when everyone gets to see the Badger fully operational for the first time in their lives. After that, we anticipate around a year and a couple months until we can hit a production state. We’re looking at sometime around the beginning of 2022 for the production of the Badger.
We’re not going to be building the same quantity that Tesla is. We will probably do around 5,000–10,000 trucks per year, because we just don’t have the capability to do more than that. It’s not our cup of tea to build a million cars per year. We’re a truck manufacturer, and we’re entering the pickup truck market, but we are going to use a partner that already has a factory, distribution, and a network. We’re going to announce who that OEM (original equipment manufacturer) partner is soon, and they’re going to help us build it, but our idea with the Badger is to make a very exclusive club where people are just waiting to buy it. We’re not going to mass produce it, I don’t want 100,000 trucks built a year. I want people lined up, waiting and camping to get their ability to touch that truck. It’s all about the marketing, and people driving around that will never sell it, because they’re like, “If I sell this truck, I’m never going to get another one because I’m going to have to wait two, three years to get it.” So, the idea behind the Nikola Badger is that it’s an exclusive club to own one.
Nikola is an American company, so how much of the production will take place in the United States?
Well, the production will be here in the US. I can’t comment on who the OEM partner is, but the production will all be here in the US. This truck was built for here in the United States and North America, so Canada, Mexico, and also Australia. We’re going to be exporting it out of here for a lot of countries until we build another factory in Europe to hit the entire European continent. It will be built here in America, and the location has not been announced yet, but it will be at Nikola World.
It seems as though Nikola is certainly a very ambitious company with high expectations. Whether it can deliver on those expectations is yet to be seen, however, especially amidst the coronavirus pandemic. Despite the challenges facing the company, Trevor Milton remains very optimistic about Nikola’s fuel cell technology, and its future prospects.
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