“It’s real, I promise!” joked Nikola chief executive Mark Russell, standing under a stylised photograph of the company’s first functioning vehicle in a factory in Ulm, Germany.
It is the first time since the group was accused of fraud by a short seller last year, and found to have faked a video of one of its prototypes by rolling it down a hill, that Russell had a viable product to show the world — a white, heavy-duty Tre electric truck, built by Italian manufacturer Iveco.
Depending on the load, it could travel more than 550km on a single charge in “ideal conditions”, Iveco and Nikola said. Journalists were offered test rides on a mostly flat track nearby.
But gone was the hype that typified the presentations of Nikola founder Trevor Milton, who now faces charges from US federal prosecutors for misleading investors about his company’s products and technology.
“We’re going very carefully, slowly, on purpose,” Russell told the Financial Times. A maximum of 50 vehicles would be delivered to customers this year, he said, half as many as Nikola had previously projected.
That number, he warned, could shrink further as “semiconductors for touchscreens, for battery cells, all those are very short globally”.
The partnership with Iveco — which includes plans for a hydrogen-powered truck that was also unveiled on Wednesday, but will not enter production until 2023 — has become central to Nikola’s business plans, after General Motors scaled down its proposed partnership with the company, causing it to axe plans for a heavily trailed pick-up truck.
The Ulm site, which was unused after manufacturing of combustion engine trucks was moved abroad, but was resuscitated by Iveco for this project, will be able to produce 3,000 units of either truck a year when fully operational, Iveco chief executive Gerrit Marx said.
The companies also signed a memorandum of understanding with Hamburg port, to supply 25 Tre electric trucks in 2022. The port of Long Beach, California, has already signed a letter of intent to order the trucks.
For now, however, the few dozen trucks produced at the 50,000 square meter plant in Ulm will all be exported to the US, before European versions (which are of different lengths and turning circles) are available in 2023. Another manufacturing plant is due to open in Arizona next month.
Marx was adamant that this time Iveco’s partner Nikola was not overselling its capabilities. “What you see today will enter production,” he said, defending Iveco’s decision to continue to work with the company.
“I could not do this on my own because Iveco, in heavy duty trucking, is the second-smallest truck [manufacturer]. We do not have the pockets, let alone the software competence that Nikola has, let alone the electric power train integration, [or] calibration competence.”
In June, Scott Wine, chief executive of CNH, which owns Iveco, told the FT that he was “not a fan” of Nikola before he took the job, and having met the company in a previous role “wasn’t thrilled with what [he] found”. But he added that the joint venture had been “mutually beneficial”.
Marx said that Iveco wanted to “outpace and outsmart” much larger rivals, “which we cannot outspend”, and needed Nikola, which could “hire people and raise capital that I cannot attract”.
Yet Nikola, which went public via a Spac in June 2020, and was briefly valued higher than Ford despite not having sold a single vehicle, is now “definitely” in need of more cash, Russell said, and is one year away from running out of funds.
It raised €300m from a consortium of private investors earlier this year and is looking to raise more from the market “when the timing is right”.
Russell conceded that Nikola was not finding it as easy to convince people to invest as when the group first listed.
“There’s been some dampening of enthusiasm for companies that go public through a special purpose acquisition merger,” he told the FT, adding that Nikola would still look to tap investors this year, “if it was opportunistically available to us”.
Asked how he would persuade investors that Nikola’s troubles were behind it, Russell said the start-up could only “stay focused and execute”.
But the plain-spoken executive did allow himself a brief moment of hype. “We are the fast furry mammal and [traditional competitors] are the large, reptilian brained, massive dinosaur.”