Nikola Motor Raises $100 Million This Month for its Hydrogen-Powered Trucks

author: Jeremy Carlton   

Hydrogen fuel-cell truck startup Nikola Motor Company has announced it raised more than $100 million this month to help the company launch and scale its hydrogen-powered trucks in 2020. The company's CEO Trevor Milton announced that he anticipates the current month long $200 million C round will be oversubscribed, after Nikola reached $100 million in new funding in just the first week.

The company has a $1.1 billion pre-money valuation.

"Nikola's business model has been vetted, and the investment world is taking notice. So far this year we have kicked-off plans to build the largest hydrogen network in the world with NEL (NEL Hydrogen), secured a massive 800-truck order commitment from Anheuser-Busch, developed the most energy dense battery system on the market with almost 400 watt hours per liter, engineered a 240 kW fuel cell, kicked-off electric vehicle stability controls and electric ABS with WABCO, designed a thermo-management and HVAC system with Mahle, finalized the most advanced class-8 independent suspension on the market with Meritor, relocated our company to Arizona to build our new 150,000 sq. ft. headquarters and now closed on $100,000,000," said Trevor Milton, CEO of Nikola.

Anheuser-Busch has placed the largest order and plans to replace its entire dedicated long-haul truck fleet in the U.S. with zero-emission vehicles.

Nikola's CFO Jonathan Spira called the Nikola One a revolutionary vehicle. Spira said that "There is little differentiation between the [existing Class 8] products from the various manufacturers."

Unlike battery electric vehicles with limited range, fuel cell electric vehicles often can travel as far per tank as diesel powered trucks. That makes them well-suited for the trucking industry.

Fuel cell trucks still use electric motors for power, but the electricity to power the electric motors comes from a hydrogen fuel cell, which draws electrons from hydrogen. They use compressed hydrogen gas, so they can be refilled as quickly as conventional gasoline or diesel vehicles.

$4 Billion in Pre-Order Reservations

Nikola's zero-emission trucks will be able to travel between 500 and 1,200 miles and be refilled in about 15 minutes. To date, Nikola has reservations for more than 8,000 sleeper trucks and day cabs worth nearly $4 billion dollars in pre-order reservations.

To support its fleet of trucks, Nikola is working with partners on a network hydrogen-filling stations.

By 2028, Nikola is planning on having more than 700 hydrogen stations across the USA and Canada.  The first 14 stations will be up and running by 2021.  The company is in discussions with the largest truck stops as well as seven states, as it prepares to launch in mid-2020 its hydrogen-electric Nikola One Class 8 truck.

"We don't plan to develop hydrogen fueling stations from scratch," Spira said. "Rather, we are going to partner with one of the largest nationwide truck stop operators, and also experienced hydrogen producers, as we roll out our hydrogen infrastructure."

In addition, Nikola is negotiating with Alabama, California, Oklahoma, South Carolina, Tennessee, Texas and Utah over the location of its first production facility.

Like Tesla, Nikola Motor was originally focused on electric trucks but the company switched to developing hydrogen-power trucks as a more commercially viable solution for the trucking industry.

The size and weight of a heavy lithium-ion battery to power a truck of this size would decrease load carrying weight and Nikola deemed hydrogen a much better, lower-cost solution for the trucking industry.

Nikola is not the only company developing hydrogen powered trucks. Toyota, Mercedes Benz, and electric automaker Tesla are also developing hydrogen fuel-cell powered trucks.

In May 2018, Nikola Motor Company has filed a lawsuit in Arizona alleging that Tesla's all-electric semi-truck infringes on the hydrogen truck startup's patents. The lawsuit claims Tesla willfully copied these patents in creating its own electric truck. Nikola is seeking $2 billion in damages in return.

Nikola will soon announce a 2019 event at its new headquarters in Phoenix, where customers, suppliers, media and industry insiders will be able to see all the latest Nikola products. Nikola recently relocated its headquarters from Salt Lake City, Utah to Phoenix.  

Jeremy Carlton