Nikola’s Electric Big Rig Beats Delayed Tesla Semi To Market

Nikola Inc., which aims to be a leader in battery- and hydrogen-powered heavy trucks, has begun production of electric semis at its new Arizona plant, getting to market at least a year ahead of Elon Musk’s delayed Tesla Semi.

The company’s Coolidge plant, about an hour southeast of its Phoenix headquarters, marked the start of commercial production of battery-powered Tre trucks Wednesday at a ceremony joined by Arizona Governor Doug Ducey, who convinced the company to set up operations in the state. The plant’s initial phase is a 250,000-square-foot facility that’s building just one truck per day currently. A 160,000-square-foot expansion that’s nearly complete will help boost Tre BEV output to five per day. A second phase of the factory opening in 2023 will make Tres powered by hydrogen.

“We have been a pre-revenue startup for years, where everything we spent we had to raise from investors,” Nikola CEO Mark Russell said at the event. “Today marks the day when we transition to customer deliveries. We have trucks that we can deliver to customers and get paid for. We’re now going to be a revenue-producing company and will be forever.”

The current low pace of production means revenue will be modest for the next few quarters, but the fact Nikola made it to this point is notable given its chaotic history. Not long after the company went public Nikola founder Trevor Milton was charged with lying to investors about the company’s technology and market readiness by the Securities and Exchange Commission—charges Milton denies. The company agreed to pay a $125 million fine to resolve the matter last year and is seeking to recover much of that expense from Milton.

Under Russell’s management, the company has tightened relations with industrial partners including Iveco, which supplies the Tre’s chassis, and Bosch, which is working with it on fuel cells for hydrogen trucks. Tests of battery-powered Tres began last year at the Port of Los Angeles and the company is targeting sales in regions such as Southern California where the Tre qualifies for an incentive for clean heavy-duty vehicles worth $120,000 per truck. (Each sells for hundreds of thousands of dollars each, though the company isn’t sharing detailed pricing.)

With a European-style “day cab” Nikola says the Tre has the longest range of any electric semi on the market, getting 350 miles per charge from its 753 kWh pack. That’s a larger battery than any of its current competitors, including electric models from Peterbilt, Kenworth, Freightliner, BYD, Volvo and Lion Electric.

Musk debuted the Tesla Semi in November 2017 saying the model would travel up to 500 miles per charge and get to market as early as 2019. Its release has been pushed back at least twice since then. This month, at the opening of Tesla’s Giga Austin plant, Musk suggested it might arrive by 2023 after production of the company’s Cybertruck pickup begins. The model was delayed by a decision to focus on higher production of profitable vehicles such as the Model 3 and Y and challenges the company has had scaling up production of its new, purpose-built 4680 battery cell.

Big rigs aren’t the only vehicle segment that competitors got to faster than Tesla. Musk’s decision to push back Cybertruck production to 2023 allowed EV startup Rivian to come to market first with its R1T model. This week Ford also began shipping its much-anticipated F-150 Lightning to customers, a battery-powered version of the best-selling U.S. vehicle for decades.

Along with making battery-powered Tres in Arizona, Nikola will also make the truck for European customers starting next year at a production line it set up at an Iveco plant in Ulm, Germany. That’s a reverse of Nikola’s plan a year ago. “We originally thought we might start exporting out of Germany first (to the U.S.) but as things evolved I don’t think we will,” Russell said. “You don’t make money by moving things across oceans.”

Nikola’s plant is located about 20 minutes from that of fellow EV startup Lucid Motors which recently began building high-end electric Air sedans in Casa Grande, Arizona. Last month, South Korea’s LG Energy Solutions also announced plans to make lithium-ion battery cells starting in 2024 at a new factory it will build in Queen Creek, a Phoenix suburb.

Nikola is using Samsung cells but said last year it will also source them from LG, and the proximity of LG’s new plant will give it an advantage. “On a cell basis we like Samsung, we like LG,” Russell said. LG “should be the cheapest supply for us–and super quality.”

Nikola shares fell 2.6% to close at $7.46 in Nasdaq trading on Wednesday. The company is to release first-quarter results on May 5.