Nikola Motors and its hydrogen truck story

In the current pandemic crisis this is like kicking a man when he’s down, but I still read uncritical stories on Nikola Motor Corporation, a Tesla wannabe since Tesla was still called “Tesla Motor Corporation.”

Nikola Motor has the attention span of a headless chicken and has been in endless hype mode for years. First it was going to use a gas turbine generator to power a big Class-8 semi truck. Then it switched to a breathtakingly grandiose scheme: zero-emissions hydrogen fuel cell trucks refueled at a network of 700 truck stops all making hydrogen on-site with renewable energy. That $3+ bn story excited many suppliers of hydrogen electrolysis, storage, pumping, and fuel cells, who have struggled with anemic demand for their products from the stalled and tiny market for hydrogen fuel cell passenger vehicles, and so Nikola got investments from them, truck part supplier Bosch, and truck body makers Fitzgerald and CNH/Iveco, all on the chance that the big idea might succeed and they’ll rake in the big bucks in orders. Of course when you’re a supplier and an investor you’ll probably be robbing yourself to make Nikola’s costs work for years…

It’s not an insane strategy, just unlikely and high risk.

But since 2016 Nikola has unveiled a slew of pointless garbage concepts. The NZT offroad vehicle. The Reckless military vehicle. The WAV personal watercraft. The Badger pickup truck. Two more truck models. And it can’t even stick to the hydrogen story! The Nikola Two and Tre commercial trucks will also come in a battery-only version without a hydrogen fuel cell. Not one of these vehicles has reached production, let alone general sales. Then late in 2019 Nikola made a pure B.S. announcement that it acquired battery tech from an unnamed university that will double the energy density, reduce weight by 40%, and halve the cost of lithium-ion batteries. If that’s really true then it can scrap the inefficient hydrogen detour, in fact scrap truck manufacturing and just make billions selling its breakthrough battery.

While Nikola farts around, battery electric trucks are available, though not yet in the biggest semi size. Just as with hydrogen fuel cell cars, there is 20x more investment, announcements, and actual sales of battery vehicles than HFCVs. You can buy battery electric buses and trucks right now, while hydrogen fuel cell is stuck in tiny demonstrations and pilot programs.

Nikola’s pitch for its hydrogen truck is to lease or sell the truck, maintenance, and fuel all-in for about $900,000 for a million-mile package, which is cheaper than diesel. But if the hydrogen doesn’t get really cheap then that package will not be profitable even when (if!) Nikola reaches scale on all the other parts of its scheme. Alas, “green” hydrogen from electrolysis remains much more expensive than making it from fossil fuel (primarily natural gas outside China). Bloomberg New Energy Finance thinks by 2030 green hydrogen will still require carbon taxes to be cost competitive. Sure, sometimes renewable energy is cheap, but if you only run the expensive electrolyzers when the sun is shining, then it dramatically raises your capital expenditure costs. If Nikola caves and gets its hydrogen from fossil fuel (where 95+% of all the hydrogen currently used comes from) that will annoy its hydrogen production and electrolysis investor/suppliers, and the optics of huge diesel trucks delivering dirty hydrogen to the truck stops will deservedly trash much of the green cred that Nikola has.

Finally CEO Trevor Milton has no engineering skills. “Big trucks avoiding the weight and recharge times of batteries by running on hydrogen that is produced at dedicated truck stops on routes.” Cool idea, bro, but ideas are cheap. What intellectual property, process innovation, or engineering breakthroughs has Nikola Motor Corporation got to realize the idea? Nothing.

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