This story appears in the May 15 print edition of Transport Topics.
Nikola Motor Co. is considering several changes related to its planned hydrogen-electric Class 8 trucks, the company told those who have made reservations and placed refundable deposits. Those changes include chassis design and leasing options.
The update came in the form of letter released in April and signed by Nikola CEO Trevor Milton. It arrived four months after the company’s Dec. 1 unveiling of its Nikola One zero- emissions Class 8 over-the-road truck in Salt Lake City.
Nikola also is developing the Nikola Two, a day cab model.
The company wrote that its “next series of prototypes” will be ready for road testing before the end of 2018. Those trucks will use hydrogen to replenish the battery-charging fuel cell.
Also, new pricing options are under consideration for those who lease the trucks, the company wrote.
For example, Nikola may offer to bill operators on a price-per-mile basis, including a minimum yearly mileage, instead of a fixed lease price, according to the company. It estimated this option could lower the cost of ownership by as much as 30%, compared with a diesel-fueled Class 8.
“We anticipate pricing specifics related to this option to be available for review by drivers in early 2019,” the company wrote.
Earlier this year, an analyst challenged Nikola’s initial economic model, which assumed the annual fixed cost of leasing one of its over-the-road trucks to be $94,000, compared with an operating cost of $132,557 for a diesel-fueled truck.
A key point was Nikola’s assumption that the truck would travel 208,000 miles a year, Michael Baudendistel, an analyst with Stifel, Nicolaus & Co., wrote in April after attending a seminar sponsored by ACT Research Co., where Nikola chief financial officer Jonathan Spira spoke.
“We don’t believe that to be a reasonable expectation even for a team-driver application, and we would peg the number for a single driver, far and away the more common usage, between 80,000-100,000 miles,” Baudendistel wrote.
Baudendistel also questioned the amount of maintenance Nikola assigned to diesel trucks — $15,000 a year compared with zero for the Nikola truck since those costs are covered in the lease. He also challenged the company’s assumptions on the cost of diesel per year, placing it at $83,200, compared with no cost for the hydrogen because it also was included in the Nikola lease payment, according to the initial plan.
Baudendistel pegged the respective cost of ownership expenses at $94,000 for a Nikola — using the truck company’s figure — but $62,749 for a diesel truck.
“In our view, several components of Nikola’s presentation failed the smell test. At the suggested pricing, our analysis shows the truck to be uneconomic,” he wrote.
In May, Baudendistel updated his perspective after reading the letter.
“My gut feeling from reading it is they are considering pricing on a per-mile basis so the customers don’t have sticker shock. It seems like cost will be a major impediment initially, which is one reason why they are only offering a lease and not selling the equipment at first,” Baudendistel told Transport Topics. “Pricing on a per-mile basis seems like an extreme way to make it seem less expensive.”
Yet, he noted that it is far too early to count Nikola’s technology out, “because you have to assume that there will be technological advancements that bring costs down like we have seen with other technologies.”
Nikola did not immediately respond to a request for comment on Baudendistel’s reports.
Meanwhile, the company reported that the next version of its trucks for testing with certain fleets will include changes to the chassis to reduce weight and size, provide better visibility, increase storage and lower the 5th wheel, among other refinements.
Operational test are planned from October 2018 through October 2021 and will include tests during severe winter and summer conditions.
The interior of the truck is also under review at Nikola.
“We know everyone is excited about the interior of the truck and its layout, so we plan on having renderings for your input in the coming months,” Nikola wrote.
Plus, the company clarified some of the terms and conditions related to its reservation-priority and deposit processes, but did not provide details, saying those in line for a truck could sign in on its website to see what changed.
In short, Nikola wrote, it is “hard at work and keeping our heads down to get this truck to market.”