Can Electric Truck Company Nikola Become the Next Tesla After Going Public?
Phoenix-based Nikola will go public this week, possibly worth $11 billion or more.
Good morning and welcome back to Speed Lines, The Drive's morning roundup of what matters in the world of cars and transportation. Today we are discussing Nikola Motors' looming initial public offer, auto plants working through the usual summer shutdown, and self-driving software company Argo AI's big new deal with Volkswagen.
Nikola's Public Play
It's been a hot minute since we've heard anything from Nikola Motor Company, the Phoenix-based electric vehicle startup that initially made a big splash with its electric semi-truck design—something it's actually suing Tesla over. But recent reports indicate things are moving right along for Nikola, including an initial public offering later this week.
The Arizona Republic reports that it could make Nikola an $11 billion company. Provided a merger with another company, VectoIQ, goes swimmingly today, the company will trade as NKLA on the Nasdaq stock market later this week. It has ambitious plans: electric and hydrogen-powered trucks, a new factory in Arizona, a pickup that looks like a Tacoma from the future, and a network of hydrogen fueling stations—two dozen in the next four years.
From that story, here's what they're up to:
Nikola's electric-battery heavy trucks are designed for short hauls of up to 300 miles and can be recharged in several hours. Its hydrogen fuel-cell trucks are designed for hauls of up to 750 miles and can be refueled within about 15 minutes. Both zero-emission vehicles are slightly heavier than conventional diesel trucks and haul slightly less freight, according to Nikola's analysis.
The company also is developing zero-emission light military vehicles, pickup trucks and off-road vehicles for consumer use, along with jet ski-like watercraft.
Now, we've got plenty of reasons to be skeptical of hydrogen power, but the long-haul trucking space seems ripe for transformation and Nikola has aggressive plans there. Anheuser-Busch has already signed on as a customer. Anytime a new player shows up in the EV space, comparisons to Tesla are inevitable; but perhaps Nikola has what it takes to become an analogous company in the trucking space.
As with any vehicle startup, time has taught us to be patient as well as skeptical. But Nikola's going to be an interesting one to watch, especially as a public company.
GM, Ford Won't Shut Down For The Summer
America's car dealers are running out of new cars—and more importantly, new trucks—after months of auto factories hitting pause over the coronavirus. As the auto industry cautiously gets back to work, it can't really afford to take a few weeks off in June and July like it normally does.
Automotive News reports General Motors and Ford are forgoing their usual summer break this year, in an attempt to drum up as much new car supply as they can. No word on Fiat Chrysler yet.
Workers at U.S. auto plants now follow aggressive safety protocols, but production has already seen many disruptions with new virus cases being reported. And the parts supply chain is also in pretty rough shape at the moment. Bad time for a vacation, in other words.
Argo AI, VW Close $2.6 Billion Deal
Finally, let's turn to the self-driving technology game. For an industry founded on the idea of disruption, this year is poised to do exactly that. The economic downturn has forced legacy automakers to dial back spending on autonomous tech, and it will likely be a death knell for many startups unable to survive. But those who do survive—through capital raises, acquisitions, partnerships and more—will be poised to dominate in the future.
Pittsburgh-based Argo AI seems headed down the latter path. It announced Tuesday that it has closed a $2.6 billion deal with VW that will effectively take it global. And Ford also has a minority stake equal to VW in the company. (In the interest of full disclosure, past Drive contributing editor Alex Roy now works for Argo AI, although he's far more involved with that company than this publication.)
Here's why that deal matters, from The Detroit News:
The newly-inked deal propels a multibillion alliance that pits Argo, VW and Ford Motor Co. against competing autonomous- and electric-vehicle ventures including General Motors Co.'s self-driving subsidiary Cruise LLC, which has the financial backing of Honda Motor Co.
[...] VW previously said it would launch products built with Argo's software in the early 2020s. The closure of the VW-Argo deal follows VW's board last week signing off on several projects that fall under its multibillion alliance with Ford. In a news release, the automaker said it expected to sign final agreements with Ford "in the near future."
In addition to their shared investment in Argo, the two automakers will initially collaborate on a handful projects, pending formal approval: a midsize pickup truck to be developed by Ford; an electric vehicle for Ford of Europe that will be built using VW's electric-vehicle architecture; a city delivery van VW will develop; and a larger commercial van developed by Ford.
Basically, our garbage coronavirus economy will kill off many the scrubs in this space, and force the survivors (and the larger automakers they partner with) into a war for the future of the technology. The battle lines are being drawn right now.
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Nikola: Next big thing, or next big dud?