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Electric Truck Race Heats up and Nikola Goes Big

The last few years have seen a rapid shift towards electrification in the automobile industry. As of yet, however, there has been little movement towards the electrification of long-haul trucks. Now that may be about to change.

Legacy automakers have been scrambling to catch Tesla, as seen in the recent agreement between Ford and VW. These traditional competitors have signed a deal to collaborate on electric platforms for vans and light-duty trucks.[1] There has been little movement towards the electrification of long-haul trucks. Nikola, the electric and hydrogen-powered truck company, recently saw its stock jump to an incredible $34 billion in market value, suggesting that this is soon to change.[2]

This is a surprising amount of money for a company that has yet to deliver any products to customers. Currently, they have $10 billion worth of orders. That sounds good and suggests strong demand. However, it is unclear exactly how much of this is locked in, and how much is merely a stated intent.[2] Critics take the stock to be too high, but there is a lot to be hopeful about for Nikola, which plans to have its first trucks on the road by 2023.[3] They have a number of critical partnerships in place, such as the 50-50 venture with CNH in Europe for batteries and a factory in Arizona on the way.[4]

Nikola is not alone, and they have an uphill battle in front of them. Tesla, the leader in auto EVs is also ahead of Nikola when it comes to long-haul trucks. Even though the California based company has pushed back deliveries of their truck, launched end of 2017, to early 2021 that is still two years ahead of Nikola. Further, a recently leaked email from CEO Elon Musk appears to show a manufacturing readiness that appears to be ahead of schedule.[5] Tesla has several other advantages: a charging network, experience in mass production, and in-house battery development.[6] 

 

Personal comment

It is exciting to see how quickly electrification is happening across the transportation sector. There are obvious environmental reasons to welcome the excitement over Nikola and the rising competition between them and Tesla. But there are also clear indications that legacy truck manufacturers are also accelerating their electrification efforts, at least partly triggered by the new kids on the block. Given that they still represent the bulk of the market, for society as a whole this may be the most important impact from the newcomers.

 

Written by Joshua Bronson, RISE.

 

Sources

1. 2020-06-10 Ford, Volkswagen Sign Agreements for Joint Projects on Commercial Vehicles, EVs, Autonomous Driving

2. 2020-06-09 Nikola hits $34 billion in market value – and no revenue

3. 2020-06-09 Nikola Skyrockets After IPO: What To Know about the EV Truck Manufacturer

4. 2020-06-09 Nikola hits $34 billion in market value – and no revenue

5. 2020-06-10 Elon Musk says Tesla Semi ready for ‘volume production’ in leaked email

6. 2020-04-21 Tesla Semi To Dominate Trucking Industry After The Pandemic Ends, Thanks To 5 Simple Reasons And One Trump Card