Nikola’s Electric Big Rig Beats Delayed Tesla Semi-to-market

Nikola's Electric Big Rig Beats Delayed Tesla Semi-to-market

Nikola Inc., which aspires to be a leader in battery and hydrogen-powered heavy-duty trucks, has begun production of electric semi-finished products at its new Arizona plant, coming to market at least a year ahead of Elon Musk’s delayed Tesla Semi. .

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 at a ceremony attended by Arizona Governor Doug Ducey, who announced convinced the company to set up operations in the state. The plant’s initial phase is a 250,000 square foot facility that currently only builds one truck a day. A 160,000-square-foot expansion nearing completion will help increase Tre BEV output to five per day. A second phase of the factory opening in 2023 will allow Tres to run on hydrogen.

“We’ve been a pre-revenue startup for years, where we had to collect everything we spent from investors,” Nikola CEO Mark Russell said at the event. “Today is the day we switch to customer deliveries. We have trucks that we can deliver to customers and get paid for. We are now becoming a revenue generating company and will be forever.”

The current slow pace of production means revenues will be modest in the coming quarters, but the fact that Nikola has reached this point is remarkable given his chaotic history. Not long after the company went public, Nikola founder Trevor Milton was accused by the Securities and Exchange Commission of lying to investors about the company’s technology and market readiness — allegations Milton denies. The company agreed to pay a $125 million fine last year to settle the case and is seeking to recover much of those costs from Milton.

Under Russell’s leadership, the company has strengthened relations with industrial partners, including Iveco, which supplies the Tre’s chassis, and Bosch, which is working with him on fuel cells for hydrogen trucks. Testing of battery-powered Tres began at the Port of Los Angeles last year, and the company is targeting sales in regions such as Southern California, where the Tre qualifies for a clean heavy vehicle incentive worth $120,000 by truck. (Each sells for hundreds of thousands of dollars each, although the company doesn’t share detailed prices.)

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

Musk debuted 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. The release has since been pushed back at least twice. This month, at the opening of Tesla’s Giga Austin factory, 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 increasing production of profitable vehicles like the Model 3 and Y and challenges the company has faced in scaling production of its new purpose-built 4680 battery cell.

Large platforms aren’t the only vehicle segment that competitors have been able to reach faster than Tesla. Musk’s decision to push back Cybertruck production to 2023 allowed EV startup Rivian to be the first to market with its R1T model. This week, Ford also began shipping to customers its highly anticipated F-150 Lightning, a battery-powered version of the best-selling U.S. vehicle in decades.

In addition to making battery-powered Tres in Arizona, Nikola will also be making the truck for European customers starting next year on a production line it has set up at an Iveco factory in Ulm, Germany. That’s the reverse of Nikola’s plan a year ago. “We initially thought we would start exporting from Germany (to the US) first, but as things evolved I don’t think we will,” Russell said. “You don’t make money moving things across oceans.”

Nikola’s factory is about 20 minutes from that of fellow EV startup Lucid Motors, which recently began building high-performance electric Air sedans in Casa Grande, Arizona. Last month, South Korea’s LG Energy Solutions also announced plans to make lithium-ion battery cells from 2024, it will build a new factory in Queen Creek, a suburb of Phoenix.

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

Nikola shares fell 2.6% and closed at $7.46 in Nasdaq trading Wednesday. The company will release its first quarter results on May 5.