‘Trillion-Dollar Company’? Q&A With Nikola Founder Trevor Milton

February 18, 2019 by John O'Dell

Nikola Motor has come out of nowhere to rack up more than $14 billion in orders for fuel-cell electric trucks that have yet to be built.

The company recently startled industry watchers, though, when founder Trevor Milton, a proud proponent of hydrogen fuel-cell technology for heavy-duty trucks, said Nikola also would produce battery-electric versions of two of its initial models.

But what matters is freeing the transportation industry from the clutches of oil, not fighting over whether batteries are better than fuel cells, Nikola’s 38-year-old chief executive told Trucks.com. The prototype Nikola One truck uses a battery pack to supply power to its electric motors; the fuel cell system generates the electricity that goes into the pack.

During an interview in at the company’s temporary headquarters in a Chandler, Ariz., industrial building, Milton, accompanied by his ever-present yellow Labrador, Taffy, talked about his goals for Nikola, tensions between fuel-cell and battery-electric proponents, and what the future holds.

Trevor Milton Nikola CEO

Nikola CEO Trevor Milton speaks at an event in Arizona, where his company is headquartered.

Here’s an edited version of the conversation:

Nikola started with a turbine electric hybrid truck, but ditched that for hydrogen fuel-cell technology. Now you are offering battery-electric models too. Why the changes?

We started with a turbine-electric hybrid because fuel-cell technology wasn’t ready yet. But by the time we built this incredible multimillion-dollar prototype, major fuel-cell issues were solved. We needed to pivot to fuel cell completely to do a true zero-emissions truck. Hydrogen fuel cells work in a lot of situations, like long-distance trucking, where battery-electric doesn’t. Batteries can work where fuel cells don’t make sense. It’s not a one-size-fits-all situation. Fuel-cell trucks are our principal focus and will be the vast majority of our business.

Did you get flak when you turned Nikola into the fuel-cell truck company?

A lot of people were critical of us; they said fuel cells would never work. They were “fool cells” as (Tesla chief executive) Elon Musk calls it, so we were the fool cell company.

You are not alone. Toyota, Hyundai and Honda all make fuel-cell cars. Toyota is developing a heavy-duty fuel-cell truck.

It is hard to tell Toyota, Hyundai and Honda they are fools. It is really frustrating to see people like Elon talk about ‘fool’ cells and try to destroy the fuel-cell world. Sure, we’re competitors, but it really makes me mad to hear those criticisms. Battery ought to be happy fuel cells exist, and fuel cells should be happy about batteries. Oil is the competitor.

Will the battery-electric option disrupt plans for your new factory?

There are no changes to the chassis. It is so easy. There are no changes on the assembly line; it’s just more batteries, less fuel cell.

How’s does it feel to have Toyota and Tesla as competitors?

People wouldn’t take us credibly as much if Toyota and Tesla were not in the market. They bring legitimacy. But I don’t consider them competitors. I love what Toyota is doing, and even if they threw $5 billion or $10 billion into this thing it would only help us. The market is huge. Toyota’s main goal is to get hydrogen everywhere. They don’t look at us as a competitor. We’ve had talks with them; they’ve been very friendly. They tell us, ‘Hey, if you can build hydrogen stations, we’ll use ’em. Please build ’em.’

And you plan to?

We’re going to have the largest hydrogen network in the world. We’ll have 700 stations operational around 2028, and there aren’t small stations. They’ll produce 8,000 kilograms a day, enough for 160 trucks, and some will go up to 24,000 kilograms. Most of them will use renewable energy to produce the hydrogen on site through electrolysis.

Where’s the money coming from to do all this?

We’ve raised about $300 million so far, and we have supplier agreements that have saved us hundreds of millions over developing the components ourselves.

Some of your suppliers have invested, and you personally invested funds from the reported $20 million sale of dHybrid Systems, your previous company, in Nikola. Who else is in?

It sold for much more than $20 million, and the buyer, Worthington Industries, is a very large shareholder in our company. But most investors have asked us not to identify them. There are lot of complications, where companies don’t want competitors to know they are invested, or financial institutions want to keep it quiet.

You are opening a new headquarters and R&D center in Phoenix later and a nearly $1 billion factory in nearby Coolidge. What’s next?

We have 100 people in Phoenix now and we’ll have 300 by end of year. At Coolidge, employment could reach 2,000. We’ll start hand-building fleet test trucks as the plant goes up; 25 next year, 100 in 2021, then limited production of commercial models in 2022 and full production in 2023. We’ll be able to build 35,000 units a year at full production now and we have the ability to go to 50,000 a year in the same plant.

You’ve said existing orders represent more than 14,000 trucks if none are canceled. What if that’s the only 14,000 you sell instead of the first 14,000?

Trucks aren’t an emotional purchase like cars. It’s all about the money. If we are cheaper to own and operate than diesel, we’ll become a trillion-dollar company. Unless diesel falls to $1.50 a gallon, unless governments end emissions regulations, I don’t see this as just our first, or last, 15,000. The U.S. market alone for Class 8 trucks is 200,000 to 300,000 a year. We believe we will be booked out for the next 30 years without ever having the ability to catch up.

Read next: Nikola Challenges Tesla With Battery-Dependent Fuel-Cell Truck

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