High profile zero-emissions transportation solutions provider the Nikola Corporation has had a fraught year past as reported in its financial results for the quarter and full year ended 31 December 2020.
Mark Russell, Nikola’s Chief Executive Officer summed up the up and down year: “In the fourth quarter of 2020, Nikola made the necessary changes to refocus and realign the company. You have seen us restructure our agreement with GM, cancel our battery electric (BEV) refuse truck programme, discontinue our Powersports program and realign the company’s resources with laser focus on our core businesses: battery electric and hydrogen fuel-cell electric (FCEV) heavy-duty trucks, and hydrogen refuelling infrastructure,” he said.
Progress on the Commissioning and Validation of the first Nikola Tre BEVs
Nikola has completed the assembly of the first five Nikola Tre BEV prototypes. All trucks are in the commissioning process and are ramping up to full speed, torque, and payload hauling capacity as part of our level two software release and vehicle validation process. Four trucks are in North America at multiple locations undergoing powertrain, durability and extreme weather testing. One truck remains in Europe for ABS braking, traction control, and electronic stability control testing. Nikola and Iveco have also begun the assembly of the second batch of prototype trucks at the Ulm, Germany facility.
Announcement of Long-Term Electricity Rate Schedule with APS
In December 2020, Arizona Public Services Company (APS) and Nikola negotiated a competitive rate that was unanimously approved by the Arizona Corporation Commission on January 12, 2021. This innovative electricity rate schedule with APS is an important step in achieving Nikola’s goal of producing hydrogen at price parity with diesel fuel. Nikola estimates that under the rate structure, it will be able to deliver hydrogen at market leading prices and within the range required for Nikola to offer a competitive total cost of ownership for its customers.
Progress Made at Joint Venture Manufacturing Facility on IVECO’s Industrial Complex in Ulm, Germany
During the fourth quarter, Nikola and IVECO made significant progress at the joint venture manufacturing facility on IVECO’s campus in Ulm, Germany. The building dismantling and refurbishment, including the civil works (floor, heating, system, and walls), have been completed. The crane and subgroup infrastructure has also been installed and is on track for completion by the end of February 2021. The assembly of the customized automatic guided vehicle systems has begun and is on pace for onsite installation beginning in March 2021. The logistics warehouse, internal logistics, end of line, finishing, enterprise resource planning system implementation, and the ordering and installation of tools and equipment are all on pace for completion by the end of May 2021, with trial production of Nikola Tre BEVs scheduled to begin in June 2021.
Progress made at Nikola’s Coolidge, Arizona Manufacturing Facility
During the fourth quarter of 2020, Nikola went vertical at its greenfield manufacturing facility in Coolidge, AZ. The steel erection process began 29 December 29, and as of today is almost complete. The roof installation is currently ongoing with siding and concrete slab to follow. The manufacturing equipment is on its way and installation is set to begin in May 2021. It is currently in the process of hiring manufacturing employees in the Pinal County area and have started training manufacturing technicians.
Company Realigns Focus on Core Product Offering General Motors MOU Agreement
On 29 November 2020, it entered into a non-binding memorandum of understanding (MOU), with General Motors (GM) for a global supply agreement related to the integration of GM’s Hydrotec fuel-cell system into its commercial semi-trucks. Under the terms of the MOU, Nikola will have the ability to work with GM to integrate GM’s Hydrotec fuel-cell technology into our Class 7 and Class 8 zero-emission semi-trucks for the medium and long-haul trucking sectors. The MOU with GM allows Nikola to dual source fuel-cell systems for our heavy-duty class 8 FCEVs.
Nikola and Republic Services End Collaboration on Refuse Truck
On 23 December, 2020, Nikola and Republic Services discontinued their collaboration on the development of a new refuse truck. After considerable collaboration and review, both companies determined that the program would take longer than previously anticipated, in addition to requiring higher than previously planned upfront development costs. The cancellation of the refuse program was one of the last steps in a series of decisions made during the fourth quarter to restructure the organization and realign resources.
Business Outlook
“Now that we have put the strategic restructuring of the business behind us, we look forward to achieving the following milestones in 2021: Start of trial production at our joint venture manufacturing facility on IVECO’s Campus in Ulm, Germany in June 2021; Start of trial production at our greenfield manufacturing facility in Coolidge, Arizona in the third quarter of 2021; Break ground on our first commercial hydrogen station(s) infrastructure; Announce hydrogen collaboration partners and electricity procurement arrangements; and Delivery of the first Nikola Tre BEVs to customers during the fourth quarter of 2021,” concluded Mark.
