Electric trucking startup Nikola is becoming a publicly traded company. The Arizona-based outfit announced Tuesday that it’s merging with a publicly listed acquisition company called VectoIQ, in a move that’s similar to what space company Virgin Galactic just pulled off in the second half of 2019. The transaction is expected to close sometime in the second quarter of this year, and when it does, Nikola will be listed on the NASDAQ exchange under the name NKLA.
Nikola will receive $525 million in new investment as a result, adding to an existing stockpile of $525 million it raised across three rounds of funding (and funding from a joint venture it started in Europe).
Founded in 2015, Nikola set out to make zero-emission big rigs using hydrogen fuel cell technology. While a number of companies like Tesla, Daimler, Freightliner, and other established players and startups are working on all-electric trucks, Nikola is one of the only ones pursuing hydrogen-powered big rigs. However it gets done, though, switching big rigs over to zero-emission powertrains could help put a big dent into the pollution caused by the transportation sector.
The startup has developed three different trucks, with the last two aimed at mass production in the US and European markets. But the company has since developed versions of its trucks that are battery-powered, too, for companies that don’t need as much range as the hydrogen-powered versions provide.
Hydrogen-powered vehicles have never really caught on in the passenger car space because there’s been very little investment in the necessary infrastructure. Where companies like Tesla and multiple governments and clean energy groups have spent the last decade building out relatively vast networks of electric vehicle chargers, only a handful of hydrogen filling stations exist to date.
But Nikola’s pitch has always been that hydrogen power makes a ton more sense in a commercial application. Since many commercial trucking routes run point to point, it’s easier to identify where hydrogen stations should be built. Nikola has argued that hydrogen trucks are even better suited for the task of long-haul trucking than battery-powered vehicles for a few reasons. It takes far less time to fill a tank than it does to charge a massive battery. Battery-powered big rigs also face a conundrum. They need big battery packs to generate sufficient range, especially with a trailer attached. But the bigger the pack, the more the truck weighs, ultimately limiting how efficient it can be.
Along the way, Nikola lined up a number of customers, including Anheuser-Busch, which ordered hundreds of trucks in 2018. It also signed a deal with energy company Nel to develop the hydrogen filling stations, and automotive supplier Bosch to help design parts of its trucks. Nikola got a big boost last year when it landed a joint venture with Iveco, a European truck manufacturer. Not only did this lend some legitimacy to the startup’s plans, it also offered them a shortcut to production.
According to documents filed with the Securities and Exchange Commission laying out the merger, the company wants to start production of its battery-electric big rigs next year and expects to deliver 600 of them. It will then double that number each year following as it brings production of the hydrogen trucks online in 2023. Nikola expects to be able to generate $3.2 billion in revenue in 2024 by selling 7,000 battery-powered trucks and 5,000 hydrogen trucks.
Nikola also wants to take the tech it’s developing for its big rigs and apply it to different form factors. Last year, the company showed off an electric personal watercraft and a four-wheeled electric off-road utility vehicle. Just last month, the company teased a pickup truck called the Badger, which would combine hydrogen fuel cell and lithium-ion battery technology to enable a range of up to 600 miles.