Nikola’s big electric rig beats Tesla’s semi-lag to market

Nikola Inc., which aims to be a leader in battery-powered and hydrogen-powered heavy-duty trucks, has begun production of electric semi-trailers at its new plant in Arizona, hitting the market at least a year ahead of the delayed Tesla Semi. Elon Musk.

The company’s Coolidge plant, about an hour southeast of its Phoenix headquarters, marked the start of commercial production of battery-powered Tre trucks on Wednesday in a ceremony attended by the Arizona Governor Doug Ducey who convinced the company to move to the state. The initial phase of the plant is a 250,000 square foot facility that currently builds a single truck per day. A 160,000 square foot expansion that is nearing completion will help increase Tre BEV’s production to five a day. A second phase of the plant opening in 2023 will make Tres hydrogen-powered.

“We’ve been a pre-revenue startup for years, where everything we spent had to be raised from investors,” Nikola CEO Mark Russell said at the event. ‚ÄúToday marks the day we transition to customer deliveries. We have trucks that we can deliver to customers and get paid for. We are now going to be a revenue-generating business and always will be.

The current low production rate means revenue will be modest for the next few quarters, but the fact that Nikola has reached this stage is remarkable given its checkered history. Shortly after the company’s IPO, Nikola founder Trevor Milton was accused of lying to investors about the company’s technology and market readiness by the Securities and Exchange Commission. , charges that Milton denies. The company agreed to pay a $125 million fine to fix the problem last year and is seeking to recoup much of that expense from Milton.

Under Russell’s leadership, the company has tightened its relationship with industrial partners including Iveco, which supplies the chassis for the Tre, and Bosch, which is working with it on fuel cells for hydrogen trucks. Testing of battery-powered Tres began last year at the Port of Los Angeles and the company is targeting sales in areas such as Southern California where the Tre qualifies for a clean heavy-duty vehicle incentive from a value of $120,000 per truck. (Each sells for hundreds of thousands of dollars each, though the company won’t share detailed pricing.)

With a European-style “day cab,” Nikola says the Tre has the longest range of any electric tractor-trailer on the market, getting 350 miles per charge from its 753 kWh pack. That’s a bigger battery than any of its current competitors, including electric models from Peterbilt, Kenworth, Freightliner, BYD, Volvo and Lion Electric.

Musk launched the Tesla Semi in November 2017, saying the model would travel up to 500 miles per charge and hit the market as early as 2019. Its release has been pushed back at least twice since then. At the opening of Tesla’s Giga Austin factory this month, Musk suggested it could arrive by 2023 after production of the company’s Cybertruck pickup begins. The model was delayed by a decision to focus on higher production of cost-effective vehicles such as the Model 3 and Model Y and the challenges the company faced in ramping up production of its new purpose-built 4680 battery cell.

Big rigs aren’t the only vehicle segment competitors have come to faster than Tesla. Musk’s decision to push Cybertruck production to 2023 allowed EV startup Rivian to hit the market first with its R1T model. This week, Ford also began shipping its highly anticipated F-150 Lightning, a battery-powered version of America’s best-selling vehicle in decades, to customers.

In addition to manufacturing battery-powered Tres in Arizona, Nikola will also manufacture the truck for European customers starting next year on a production line it has installed at an Iveco plant in Ulm, Germany. It’s the reverse of Nikola’s plan a year ago. “Initially, we thought we could start exporting out of Germany (to the US), but as things evolved, I don’t think we will,” Russell said. “You don’t make money moving things across oceans.”

The Nikola plant is located about 20 minutes from that of Lucid Motors, another electric vehicle start-up, which recently began building premium Air electric sedans in Casa Grande, Arizona. Last month, South Korean company LG Energy Solutions also announced plans to manufacture lithium-ion battery cells starting in 2024 at a new plant it will build in Queen Creek, a suburb of Phoenix.

Nikola uses Samsung cells but said last year that it would also source from LG, and the proximity to LG’s new factory will give it an advantage. “On a cellular basis, we like Samsung, we like LG,” Russell said. LG “should be the cheapest offer for us – and super quality”.

Shares of Nikola fell 2.6% to close at $7.46 on Nasdaq on Wednesday. The company is due to release its first quarter results on May 5.

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