COOLIDGE, Ariz. — Electric truck and hydrogen maker Nikola Corp.’s financial struggles — a  near-record-low stock price, weak cash position and inability to access reasonably priced capital — feed legitimate concerns about its survival. But visit the plant about an hour east of Phoenix and you come away with a different take.

First, the L-shaped production line is full across all 15 assembly stations. Nikola is capable of building five or six Class 8 battery-electric vehicles (BEVs) a day. Remember the days when a skeptic flew a drone over the Sonoran Desert site, capturing the scant construction activity below?

The first phase of the plant is done. The second is close. A third is on indefinite hold. Production is slow by design. The 78 workers finish one or two trucks a day because they cost more to make than the $374,000 that Nikola charges. The company has told stakeholders this. It counts on state and federal incentives to offset a large chunk of the purchase price.

The mating of the battery-electric Nikola Tre body and chassis takes place on the assembly line in Coolidge, Arizona. (Photo: Alan Adler/FreightWaves)

Outside the plant, scores of finished white trucks stand neatly parked in rows. Some await over-the-air software upgrades before being shipped to dealers. Nikola claims the inventory glut reflects a lack of charging infrastructure, proving the chicken-and-egg truism that electric trucks are just oversized paperweights without a place to charge them.

An inventory glut of Nikola Tre battery-electric trucks wait for software updates before shipping to dealers. (Photo: Alan Adler/FreightWaves)

Nikola aggressively cutting costs

Reducing cost is Nikola’s burden. Most of a 7% headcount reduction in November fell on 400 Romeo Power employees Nikola inherited from its $144 million all-stock purchase of its troubled battery supplier last August. Some workers did not want to move to Arizona when Nikola filed a closing notice for Romeo’s plant. Others were unneeded.

No more job cuts are likely, CEO Michael Lohscheller told me. But that’s not a promise. Tech layoffs continue unabated — 10,000 more at Meta Platforms Inc. (Facebook) just this week. Startups realize they added too much headcount when money was cheap and easy to get. 

Localizing Nikola manufacturing

A guided tour of the assembly stations demonstrates Nikola maturing as a manufacturer, especially compared to 11 months ago when the company staged the first trucks built by customer names and single-digit vehicle identification numbers. VINs now extend into the 300s.

That’s far fewer than Nikola projected. But it’s enough to prove this is no longer just a show for politicians and media as it was last year.

Nikola CEO Michael Lohscheller stands with the 308th battery-electric Nikola Tre assembled at the plant some believed would never be built. (Photo: Alan Adler/FreightWaves)

Far less noisy than a legacy truck plant churning out scores of units a day, automated guided vehicles move the underside of the trucks until the marriage of chassis and cab. The trucks then roll along for finishing touches and quality checks.

Chassis originally imported from manufacturing partner Iveco in Europe now come from a Metalsa plant in Mexico. Fully assembled cabs still come from Iveco in Madrid, Spain. But parts and components sourced within United States-Mexico-Canada Agreement countries are becoming common.

Batteries that arrived in a trickle from Romeo will be assembled in the Nikola plant beginning April, sooner than projected. As Romeo’s owner, Nikola is digging into the innards of the battery to reduce costs and improve efficiency. One example: removing resistors that increased how much regenerative braking could return heat from stopping as energy to the battery. 

Once fully relocated from Cypress, California, the packs of 4,608 lithium-ion cells will move through 15 substations on a spur before installation on the main line. Though a court may decide otherwise, Nikola has no plans to sell batteries to Romeo customers like Lion Electric and Lightning eMotors.

Fuel cells best bet for Nikola’s future

When disgraced founder Trevor Milton started Nikola, it was going to make zero-emission hydrogen-powered fuel cell trucks and the fuel to power them. Then the Tre BEV truck — initially planned exclusively for Europe — became Nikola’s first U.S. product. Its easily maneuverable cabover design appealed to U.S. fleets.

Lohscheller, who joined Nikoka as president last year and became CEO in September, thinks the original plan was correct. He predicts four of five Nikola trucks sold by 2026 will be fuel cells.

The fuel cell electric Nikola Tre is shown in preproduction at Nikola’s plant in Coolidge, Arizona. (Photo: Alan Adler/FreightWaves)

“I see the battery as the first step into the direction of zero-emission mobility,” Lohscheller told me. “The real potential is for us in the fuel cell truck because it has a longer range. It has less fueling time. It has less weight, and we can combine it with our energy.”

The first Proterra Inc. batteries for the fuel cells fill a roped-off pallet on the production floor in the roughly 150-yard fuel cell area. The third preproduction version of the Tre FCEV goes by the Greek letter Gamma. It’s the last before series production in the second half of the year.

Robert Bosch-licensed twin fuel cell stacks are ready. Nikola licenses the right to explore inside the Bosch box to suss out efficiency improvements, according to Pedro Garcia, who heads Nikola’s 180-member propulsion team at Coolidge.

Fuel cell stacks from Robert Bosch are being installed in trucks at Nikola. (Photo: Alan Adler/FreightWaves)

Racing ahead with 78,000 pounds in tow

On Nikola’s 1.4-mile oval test track, the Tre FCEV reaches 65 mph in what feels like seconds while towing a flatbed of large rocks and stones for a total combined weight of 78,000 pounds. 

Since all fuel cell trucks are series hybrids, the 200-kilowatt battery pack provides the single-speed oomph before the 200kW continuous power fuel cell takes over for the higher speeds. Treated properly, the fuel cells are good for 20,000 hours.

Addressing Nikola’s fueling challenge

Nikola’s heavy lift is assuring it can provide sufficient hydrogen for fleets of fuel cell trucks. At about 7.5 miles per kilogram, one truck needs 40 kilos of hydrogen for 500 miles of driving.

Watch now: Refueling a Nikola hydrogen fuel cell truck

Nikola plans a hydrogen-making hub in nearby Buckeye, Arizona, initially producing 30,000 kg of hydrogen a day for 60 hydrogen fueling stations planned by 2026. The first four will be in neighboring California, where strict emissions regulations will hasten adoption of fuel cells that only emit water vapor from the chemical reaction of hydrogen and water.

“When we start producing hydrogen here in Phoenix, we have to do it with partners,” Lohscheller said. “We need their expertise. We need their money [and] their resources, everything.”

With the help of partners, Nikola is also building mobile tube trailers of gaseous hydrogen that accompanying refuelers compress and dispense hydrogen at a customer site. Liquid hydrogen versions are due in Q3.

Nikola will offer mobile hydrogen refueling while it builds out a hydrogen station network. (Photo: Alan Adler/FreightWaves)

Mobile hydrogen refueling competition 

Meanwhile, California’s First Element, which is responsible for most passenger vehicle hydrogen stations in the state, is branching out to commercial truck refueling.

The Hyundai Xcient fuel cell truck, which is probably Nikola’s biggest competition, successfully tested refueling with First Element’s mobile refueler this week, according to a news release. The First Element mobile refueler is capable of high-capacity fueling at 125 kilograms per hour. First Element says it is piloting refueling for other heavy-duty FCEVs.

Hyundai Class 8 XCIENT fuel cell truck fuels at a First Element high capacity mobile refueler, part of a pilot program for several other heavy duty fuel cell vehicle manufacturers. The truck is servicing routes throughout California. (Photo: First Element)

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