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Category: Nikola and Stock Market
Last updated: 13 June 2020 Stock price: $64 On this page we will look to provide more details, often not covered by mainstream financial websites of Nikola, a zero-emissions transportation and infrastructure solutions provider. The company is a designer and manufacturer of battery-electric and hydrogen-electric vehicles.
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About Nikola Corporation
Nikola Corporation is globally transforming the transportation industry. As a designer and manufacturer of battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen fueling station infrastructure, Nikola is driven to revolutionize the economic and environmental impact of commerce as we know it today. Founded in 2015, Nikola Corporation is headquartered in Phoenix, Arizona
The Company operates in three business units: Truck, Energy and Powersports. The Truck business unit is developing and commercializing battery-electric vehicle (“BEV”) and hydrogen fuel cell electric vehicle (“FCEV”) class 8 trucks that provide environmentally friendly, cost-effective solutions to the short haul and long-haul trucking sector. The Energy business unit is developing and constructing a network of hydrogen fueling stations to meet hydrogen fuel demand for FCEV customers. The Powersports business unit is developing electric vehicle solutions for military and outdoor recreational applications.
In 2019, we partnered with Iveco, a subsidiary of CNHI, a leading European industrial vehicle manufacturing company. Together, Nikola and Iveco are jointly developing cab-over BEV and FCEV trucks for sale in the European market which will be manufactured through a 50/50-owned joint venture in Europe. The joint venture is expected to commence operations in the third quarter of 2020. Our joint venture with Iveco provides us with the manufacturing infrastructure to build BEV trucks for the North American market prior to the completion of our planned greenfield manufacturing facility in Coolidge, Arizona.
We plan to begin construction on our greenfield manufacturing facility in late 2020, and Iveco will contribute technical engineering and production support. Phase 1 of the greenfield manufacturing facility will be completed by the end of 2021, and we expect to start BEV production at the facility in 2022 and FCEV production in 2023.
To date, we have financed our operations primarily through private placements of redeemable convertible preferred stock. From the date of our incorporation through December 31, 2019, we have raised aggregate gross proceeds of approximately $401.8 million from the issuance of redeemable convertible preferred stock, both for cash and in-kind contributions of services and intellectual property. We incurred a net loss of $88.7 million and used $80.6 million in cash to fund our operations during the year ended December 31, 2019
The Company operates in three business units: Truck, Energy and Powersports. The Truck business unit is developing and commercializing battery-electric vehicle (“BEV”) and hydrogen fuel cell electric vehicle (“FCEV”) class 8 trucks that provide environmentally friendly, cost-effective solutions to the short haul and long-haul trucking sector. The Energy business unit is developing and constructing a network of hydrogen fueling stations to meet hydrogen fuel demand for FCEV customers. The Powersports business unit is developing electric vehicle solutions for military and outdoor recreational applications.
In 2019, we partnered with Iveco, a subsidiary of CNHI, a leading European industrial vehicle manufacturing company. Together, Nikola and Iveco are jointly developing cab-over BEV and FCEV trucks for sale in the European market which will be manufactured through a 50/50-owned joint venture in Europe. The joint venture is expected to commence operations in the third quarter of 2020. Our joint venture with Iveco provides us with the manufacturing infrastructure to build BEV trucks for the North American market prior to the completion of our planned greenfield manufacturing facility in Coolidge, Arizona.
We plan to begin construction on our greenfield manufacturing facility in late 2020, and Iveco will contribute technical engineering and production support. Phase 1 of the greenfield manufacturing facility will be completed by the end of 2021, and we expect to start BEV production at the facility in 2022 and FCEV production in 2023.
To date, we have financed our operations primarily through private placements of redeemable convertible preferred stock. From the date of our incorporation through December 31, 2019, we have raised aggregate gross proceeds of approximately $401.8 million from the issuance of redeemable convertible preferred stock, both for cash and in-kind contributions of services and intellectual property. We incurred a net loss of $88.7 million and used $80.6 million in cash to fund our operations during the year ended December 31, 2019
Nikola semi-truck
Summary of Nikola FCEV truck reservations
The image below shows the summary of FCEV truck reservations prior to the their book freeze in the fall of 2019.
Nikola BEV demand: following unveiling of Nikola BEV truck in Fall 2019, company has been engaged with potential strategic customers
- Discussion focused on multi-thousand truck pre-orders with binding contracts with significant deposits 12 months prior to delivery
- Robust BEV demand projected to fill first 2 – 3 years of production
Nikola BEV demand: following unveiling of Nikola BEV truck in Fall 2019, company has been engaged with potential strategic customers
- Discussion focused on multi-thousand truck pre-orders with binding contracts with significant deposits 12 months prior to delivery
- Robust BEV demand projected to fill first 2 – 3 years of production
- FCEV demand equally robust, with reservation book projected to fill first 2+ years of production
Overview of Nikola's target market
Key drivers for zero emission commercial vehicle demand
In the highly competitive trucking industry, when choosing between truck models that meet their technical requirements, customers mainly base their purchasing decision on total cost of ownership ("TCO"). TCO is the total cost of owning the truck through its lifecycle, including lease cost or purchase payment, fuel cost, service, and maintenance. According to ACT Research, traditionally, TCO for diesel trucks (excluding driver wages, benefits, and insurance), is typically broken down into cost of fuel (approximately 50%), purchase or lease payments on truck (approximately 22%), and repairs and maintenance (approximately 28%).
Historically, diesel fuel comprises 40% to 60% of TCO, depending on prevailing diesel fuel prices. With the incumbent ICE technology, fleet operators are also forced to accept volatility in their largest cost component, creating risk and uncertainty. Nikola's bundled lease will provide customers TCO clarity for the first time in the industry's history.
- Commercial vehicle buying decision driven by Total Cost of Ownership (TCO)
- The largest Class 8 fleets are replaced every 3-5 years on average — adoption of new technology is expected to be rapid once it passes TCO parity threshold
- Increasingly stringent global emissions standards will increase comparative advantage of zero emissions vehicles relative to diesel
- In some cases, such as city centers, diesel will be banned entirely
- Governments, fleet owners, and other stakeholders are demanding a zero emissions solution
In the highly competitive trucking industry, when choosing between truck models that meet their technical requirements, customers mainly base their purchasing decision on total cost of ownership ("TCO"). TCO is the total cost of owning the truck through its lifecycle, including lease cost or purchase payment, fuel cost, service, and maintenance. According to ACT Research, traditionally, TCO for diesel trucks (excluding driver wages, benefits, and insurance), is typically broken down into cost of fuel (approximately 50%), purchase or lease payments on truck (approximately 22%), and repairs and maintenance (approximately 28%).
Historically, diesel fuel comprises 40% to 60% of TCO, depending on prevailing diesel fuel prices. With the incumbent ICE technology, fleet operators are also forced to accept volatility in their largest cost component, creating risk and uncertainty. Nikola's bundled lease will provide customers TCO clarity for the first time in the industry's history.
Nikola BEV truck
Nicola's North America Battery Electric Vehicle (BEV) truck timeline
- Plan: Take the current Iveco S-Way platform and electrify the powertrain
- Iveco Responsibilities: Cab, chassis, and vehicle integration
- Nikola Responsibilities: e-Axle (motors and inverters), battery pack, BMS, vehicle controls strategy, and infotainment
- Production Strategy:
- import units from Iveco’s Ulm Facility,
- CKD production in US,
- full production in US
- Projected Schedule:
- Unveil first truck in Hanover on Sept. 24, 2020
- Utilize Iveco’s Ulm facility in Germany for prototype, pre-series, and low volume builds in 2020 and 2021
- Begin limited testing with fleets in Q4 2020
- Enter low volume production in Q1 2021