Alternative fuel truck developer Nikola Corp. NKLA is on a wild ride.
After a reverse merger with special purpose acquisition company VectoIQ brought the company's shares to market June 4, it has witnessed both hype and criticism of hydrogen-powered vehicles.
Benzinga spoke with Nikola President and CEO Mark Russell this week about the young startup’s ambitious hydrogen network plan, foreign markets and his thoughts on the IPO.
The company is focused on a "problem for mankind," Russell said in the interview: the changing climate.
The company has purchased 85-megawatt alkaline electrolyzers from Oslo-based hydrogen company Nel ASA NLLSF to build five fueling stations capable of churning out over 40,000 kgs of hydrogen daily.
This investment will let Nikola begin work on hydrogen fueling stations capable of fueling between 400 to 2,000 trucks per day based on station size.
Benzinga: What makes you confident that you can validate your hydrogen network proposition to convince other players to join the campaign? Where will you begin to prove your vision of long-ranged hydrogen travel?
Russell: The story has been a chicken-and-egg problem. You want to build hydrogen vehicles, but there is no place to fuel them. You might want to build a hydrogen station, but nobody is going to come there to fuel because there are no vehicles.
When we went to look for customers and said, "we can provide you with the truck, the fuel, and the maintenance, the whole solution, you just provide the driver and the load, and we will do it at a price that is equal to your current diesel cost," they said "sold."
It was really easy to sell this vertical integration. In fact, we sold out really fast in terms of reservations.
Nel has proven the infrastructure. They have been running fuel cells in reverse. They have been running electrolysis cells for decades. Norway had an excess of hydro power, and we said, “how about we use it to make hydrogen?"
So now it is just a matter of execution. We just have to pick a city pair that we can tie together, where we can build a fueling station on either side of that pair of cities, and then we can cover all the trucks that go back and forth between those cities on a long-haul dedicated route.
So, we can build a station here in Phoenix, on Interstate 10 west of metro Phoenix. We can build a station east of metro Los Angeles on Interstate 10. We can tie Interstate 10 together in these two cities. We can do it in bite-sized pieces, one city pair at a time, two stations at a time.
BZ: What are your ambitions in the non-European foreign markets?
Russell: This is a problem for mankind. We are starting in North America and Europe because that is where we can prove the model, but once we prove it there, we do have long-term plans to go all over the world and provide it everywhere because, again, this is about saving the planet.
That is why we also welcome competitors to join us. We will fuel anybody at our stations and will also have charging for battery vehicles, so anybody who needs fuel or needs charging can come to our stations and get it.
We are still hoping that we get vehicles out of our European manufacturing plant in Ulm, Germany in 2021, before the end of the calendar year, but we will announce our specific, one-time COVID-19 delay as soon as we are able to, and that should be not too far down the road.
BZ: What are your thoughts about your current valuation vis-à-vis both the hype and skepticism surrounding Nikola? Do you have any words for investors?
Russell: The market has received our reverse-merger with VectoIQ really well. We are very grateful for the interest. That gives us confidence that we are going to be able to continue to have access to the capital that we need to execute on our business plan and scale all over the world.
We are still essentially a startup and newly listed, and we are pre-revenue, so we do not expect the market to be stable. We think it will be somewhat volatile going forward, which does not surprise us, but we are so thrilled with the positive reception that we have gotten out of the gate with our stock.
Photo courtesy of Nikola.
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