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US-based heavy-duty electric and hydrogen truck maker Nikola
began 2022 in much the same way as it ended 2021, unveiling
domestic deals on 5 January and 6 January for its Tre BEV model
that could lead to larger purchases.
The company, which faced mockery of its concepts and
products as well as US regulatory discipline on its journey from a
start-up to publicly traded company, is beginning to build some
sales momentum. But the road for manufacturers and the
infrastructure surrounding heavy-duty haulage using battery
electric vehicle (BEV) and hydrogen-based technology will be
arduous and long, say analysts.
The manufacturer said 5 January it had signed a
letter of intent for the purchase of 10 Tre BEV with USA Truck. The
deal also includes an option to buy a further 90 Nikola trucks over
the next two years. Nikola's partner Thompson Truck Centers will
provide service, maintenance, and the infrastructure for the
trucks. The trucks will be delivered in the first half of 2022, the
companies said.
Van Buren, Arkansas-based USA Truck has over 2,000 drivers and
expects the deal with Nikola to further its environmental, social, and governance (ESG)
goals. The company is already recycling the metal from its
repairs, recycling oil and oil filters, and deploying low-rolling
resistance tires as part of its ESG efforts, it said.
A day later on 6 January, Nikola said Saia LTL Freight had inked
a letter of intent to purchase or lease 100 Tre BEVs after the
"satisfactory completion" of a demonstration program involving
three trucks that is set to begin in the first half of 2022. If
this works out, the first 25 of the order for 100 Tre BEVs will be
delivered in 2022 and the remainder by the end of 2024. Johns
Creek, Georgia-based Saia LTL Freight specializes in
less-than-truckload services.
Before that, in late December, Nikola said Oak Brook,
Illinois-based bulk liquid specialist Heniff Transportation Systems
signed a similar deal to the
USA Truck agreement, with an initial acquisition of 10 cabs.
Deliveries are expected to commence in the first half of 2022. Upon
successful deployment, Heniff would buy an additional 90 trucks,
Nikola said.
At present, Heniff has a fleet of more than 2,000 tractors. CEO
Bob Heniff said the deal was part of an acceleration of
electrifying the company's fleet.
Nikola began delivery of Tre BEV model cabs in 2021 and expects
to be able to supply customers with the Tre FCEV, short for fuel
cell electric vehicle and powered by hydrogen, in 2023 and its Two
FCEV sleeper option (which allows the driver to sleep more
comfortably in the cab on long-haul trips) from 2024 onwards. In an
FCEV, the power generated by the fuel cell stack is used to drive
an electric motor, and Nikola's plans also involve an onboard
rechargeable battery.
While deployment of Nikola's FCEV models is a little behind that
of the Tre BEV, the company in October said a deal was in place for
Aliquippa, Pennsylvania-based PGT Trucking to lease 100 Tre FCEVs
following the "satisfactory completion" of a demonstration program.
Delivery of the cabs to PGT is expected to begin in 2023 when
production commences at Nikola's Coolidge, Arizona, manufacturing
facility, the truck maker said.
Manufacturing plants
Tre FCEV production will also begin 2023 in Germany in
partnership with European truck manufacturing powerhouse Iveco,
which is controlled by CNH Industrial, part of the transportation
holdings of the Agnelli family, the driving force behind the rise
of Italian car manufacturer Fiat.
Nikola and Iveco inaugurated the manufacturing plant in Ulm in
September. The trucks will be based on the Iveco S-WAY truck
platform. Tre BEV production will start in 2022.
Launching the battery technology first will drive the maturity
of the underlying platform before adding the fuel cell as a
range-extension technology, the partners said.
Iveco has a number of other partnerships underway to develop
alternatives to existing fuels used by trucks. In December, the
company said it had teamed up with
industrial gas specialist Air Liquide to develop heavy-duty
hydrogen trucks as well as refueling solutions. In November, Iveco
said it was working with
Italian utility Edison on deploying LNG-powered, heavy-duty
trucking options. The deal was part of a raft of options for Iveco,
CEO Gerrit Marx said in a statement, and built upon existing
biomethane-powered trucking options the company already offers.
Nikola and Iveco's FCEV plans are based on another partnership
with an established manufacturer the US company has linked up
with—German engineering group Bosch. The Tre FCEV and Two FCEV
models will use a Bosch commercial vehicle fuel cell stack, the
companies announced in September.
Such partnerships, and others in the hydrogen infrastructure
environment, have substantially lowered the risk surrounding Nikola
as well as the company's potential capital requirements, according
to DA Davidson Senior Research Analyst Michael Shlisky.
Nikola has hydrogen production and fueling station deals in
place with Canadian pipeline and storage specialist TC Energy, truck stop operator
TravelCenters of America,
Indiana-based gasification plant owner Wabash Valley Resources, and
renewable gas producer and distributor Opal Fuels.
The multi-layered nature of Nikola's dealmaking reflects the
hurdles the company and its BEV and FCEV competitors face in
building the infrastructure to kickstart the sector's growth.
The transportation industry has never seen a transition like
this before, American Trucking Associations Energy and
Environmental Counsel Glen Kedzie told Net-Zero Business
Daily 4 January. There's no flipping a switch and everything
being ready, he said. The diesel infrastructure the US haulage
industry of today took 75 years to build, Kedzie noted. Building
the alternative infrastructure for BEVs and FCEVs will require lots
of expertise, money, and patience, he added.
Distance from Milton
Patience has been a requisite for Nikola backers and investors
over the past couple of years as the company dealt with the fallout
from comments by founder Trevor Milton.
After charges were filed by the US Securities and Exchange
Commission (SEC), the company agreed to pay a $125-million fine and
promised to give the agency all the help it requests, but Milton is
still facing criminal proceedings in New York. Nikola's settlement with the SEC in 2021
was over charges it defrauded investors by misleading them about
its products, technical advancements, and commercial prospects.
The SEC said Nikola misled investors by misrepresenting or
omitting material facts about the refueling time of its prototype
vehicles, the status of its headquarters' hydrogen station, the
anticipated cost and sources of electricity for its planned
hydrogen production, and the economic risks and benefits associated
with its contemplated partnership with a leading auto
manufacturer.
Nikola said 21 December that the first
installment of the fine would be paid by the end of 2021. The
company said it had taken action to seek reimbursement from Milton
for costs and damages in connection with the government and
regulatory investigations. A spokeswoman for Nikola declined to
comment on what stage its efforts seeking redress were at when
contacted by Net-Zero Business Daily.
Milton, meanwhile, is still being targeted by the SEC and the US Attorney for the Southern
District of New York, charged with securities and wire fraud
over the development of products and technology at Nikola.
Part of the New York charges involve Milton taking advantage of
going public by merging with a Special Purpose Acquisition Company
or "SPAC," rather than through a traditional initial public
offering (IPO). The criminal and civil charges against Milton were
the most aggressive charges in connection with a SPAC and de-SPAC
transaction—taking the company public after the SPAC has
identified a target—that the US Department of Justice (through
the US attorney's office) or the SEC had brought to date, lawyers
from Clifford Chance said in an August note.
SEC Chairman Gary Gensler said in December there were 181
de-SPAC transactions in 2021, with a total deal value of $370
billion, compared with 26 in 2019. Gensler said in December he
wants to offer potential SPAC investors the same protections when
it comes to disclosure, marketing practices, and gatekeeping
obligations as is available for traditional IPO investors.
Transforming trucking
Nikola is now a public company, subject to full SEC scrutiny in
its statements such as the latest announcements on deals with
buyers and partners, of which there are expected to be good deal
more, because a great deal of change is coming to the trucking
industry, experts say.
The distance trucks are travelling is decreasing, with the whole
supply system changing, according to ATA's Kedzie, which is a
positive change for BEV and FCEV truck manufacturers.
The move to BEVs, FCEVs, and hydrogen trucks is going to happen,
the only questions are on the timing, said Kedzie. The first
adopters will those players who use a hub and spoke methodology,
with 50- or 100-mile roundtrips, he said. This type of customer is
the focus of the Tre BEV and Tre FCEV, according to Nikola.