Start-up hydrogen fuel cell and electric-truck maker, Nikola has announced it has merged with a publicly traded acquisition company , VectoIQ Acquisition ready and says it’s ready for the next chapter in its growth.
Nikola execs speaking during a conference call said that moves previous announcements such as its deal with Iveco in Europe and the unveiling of its Badger pickup truck, along with the funds available as a result of the with this merger with VectoIQ will enable it to move to production of a battery-electric truck next year and its fuel-cell electric trucks in 2023.
In the conference the executives said that VectoIQ Acquisition and Nikola will create a company focused on the development of next-generation smart transportation and will have a combined value of around at $US3.3 billion. The new company will be called Nikola Corp. and is expected to remain NASDAQ-listed under the symbol NKLA.
The management team of the new company will be headed by current Nikola CEO Trevor Milton as executive chair while current Nikola president Mark Russell will be president and CEO.
VectoIQ boss Steve Girsky said the company has been working to identify the right target for a major merger like this and said that Nikola’s main attraction was that it is producing not only two different powertrain options of electric trucks (battery-electric and hydrogen fuel-cell electric), but also refueling and energy storage fascilities.
“The current fuel cell electric reservations, which have committed over $10 billion, are proof of how badly the market is seeking a solution like Nikola,” Girsky said.
“This deal will help Nikola move to the next level, not only with capital, but also with decades of automotive expertise,” he said.
Trevor Milton said the deal will help fuel the “next chapter of Nikola’s growth,” noting that the Investors “share our vision of a zero emission future in transportation.”
“I founded the company to completely disrupt the energy and transportation market,” he said.
“I knew that Nikola would not be successful if it only sold vehicles like other manufacturers do,” Milton said.
“Much like Amazon, we knew vertical integration was key and from day one our goal was to integrate the truck and the energy it consumes into a single solution or lease payment,” he added.
“We can now offer an all-in lease rate that can fix the total cost of ownership for seven years. By signing long-term green energy contracts, we can produce green energy – hydrogen – resulting in a zero emission business model from production to consumption, something no other OEM has been able to achieve,” Milton said.
Milton also said last month’s announcement of the Nikola Badger electric pick up truck will help it accelerate its efforts to get its electric semis in production.
“The Badger will help drive down the cost of our hydrogen fuel cells and other components for our semi truck program,” Milton said.
“Most automotive suppliers charge a premium on parts for trucks due to lower volumes. But with the Badger, we can combine parts to drive down the cost of each component when possible.”
Mark Russell pointed to the recently announced joint venture with Iveco parent company , CNH Industrial in Europe. which has enabled it to significantly ‘accelerate its go-to-market timelines’.
Last month, the companies announced that production of the Nikola Tre battery electric truck will take place at an Iveco plant in Ulm in Germany.
Russell said that North American production of the Tre battery electric vehicle is scheduled to begin in a new facility in Coolidge, Arizona, in 2022, followed by start of production of the Nikola 2 fuel-cell electric vehicle estimated in 2023.
He added that the company’s strategy of partnering with companies with long time industry expertise, like Bosch, Meritor, Wabco, and others, has helped it reduce the risks in developing the technology and ramping up for production.
“Also our bundled leasing model allows us to solve the chicken and egg challenge that’s hindered the growth of hydrogen-electric vehicle markets,” Russell said.
Nikola is initially focussing on customers with dedicated long-haul routes and building hydrogen stations to specifically serve their needs.
“What we offer these dedicated route customers is essentially freight as a service, with a single price for a solution that includes the truck, maintenance and the fuel, locked in for the life of the lease, with a refuelling station rollout plan that addresses concerns about access to fuel, all at a price competitive with their existing diesel fleets, ” he said.
According to Nikola, the company already has a massive $US10 billion worth of reservations for its fuel-cell electric trucks. Although it has not yet disclosed any battery-electric truck reservations, the company said negotiations are entering final stages for “large binding orders” for battery-electric trucks.
The company said it expects to go from $US150 million of projected revenue in 2021 to over $US3 billion by 2024. That’s assuming 600 battery-electric trucks in 2021, and 7,000 battery-electric and 5,000 fuel-cell-electric trucks in 2024.