Hydrogen-Electric Truck Maker Nikola Corp Announces Major Fuel Cell Production Agreement with Bosch
Fuel cell truck developer Nikola announced a licensing deal with Bosch to use its fuel cell modules for its hydrogen powered trucks. The fuel cell modules will be engineered and designed to meet Nikola's requirements for the rigors of commercial use.
By partnering with Bosch, which is one of the world's biggest component suppliers in the auto industry, Nikola will gain competitive cost and performance advantages for its fuel cell electric (FCEV) Class 7 and 8 trucks.
Nikola's fuel cell trucks are a bit different from purely electric vehicles. The technology uses a hydrogen-powered fuel cell to generate electricity to charge the truck's batteries, which in turn is used to power the truck's electric motors. The only byproduct from converting the hydrogen to usable electricity via a fuel cell is plain water.
Bosch will provide major fuel cell components for Nikola's trucks, including the fuel-cell stack, air compressor, power electronics and control unit with sensors. The two companies will work together to source the remaining components for the assemblies.
The fuel-cell power module assembly will begin in 2023 at Nikola's manufacturing facility in Coolidge, Arizona, where Nikola's Tre fuel-cell electric truck will also be assembled.
Nikola and Bosch have defined together a scalable and modular approach for the Nikola Tre and Two truck applications by using multiple fuel-cell power modules utilizing Bosch's heavy-duty commercial vehicle fuel-cell stack.
The first truck powered by the fuel cell stack will be Nikola's Class 8 regional-haul Tre FCEV. The truck is expected to have a range of 500 miles. However, Nikola is working on a long-haul truck named the Nikola Two with an anticipated range of up to approximately 900 miles.
The two trucks will utilize common fuel-cell power modules in 200 kW and 300 kW configurations, Nikola says.
"This announcement is the result of a multi-year working relationship with Bosch," said Nikola CEO Mark Russell. "After extensive analysis of the best options out there, we are proud to enter into this strategic relationship with Bosch."
Nikola said its currently testing the Tre FCEV alpha vehicles using the Bosch fuel-cell modules and plans to begin road testing the truck by the end of 2021 in customer pilot tests.
The Nikola Tre FCEV will also be launched in Europe, utilizing the same Bosch fuel-cell power modules. the trucks will be manufactured as part of Nikola's joint venture with Italian truckmaker IVECO in Ulm, Germany.
To support the production of the Bosch fuel cell modules, Nikola plans to expand its Coolidge manufacturing facility by another 50,000 sq. ft. Nikola will add around 50 new manufacturing jobs to accommodate initial fuel-cell power module assembly by 2023.
Nikola is also expanding engineering and testing facilities to support the fuel-cell and vehicle validation and testing at Nikola's Phoenix headquarters.
Nikola's Rough 2020
Nikola was once viewed by many as having the potential to disrupt the trucking industry with its innovative, zero emissions hydrogen powered electric trucks.
In June 2020, Nikola completed a reverse merger with special purpose acquisition company (SPAC) VectoIQ Acquisition Corp and became a public company trading on the NASDAQ under the ticker symbol "NKLA."
The IPO valued Nikola Corp at roughly $20 billion and the stock more than doubled in the days after its Wall Street debut.
In Sept 2020, U.S. automaker General Motors announced a $2 billion investment for an 11% equity stake in Nikola. The deal included GM building Nikola's Badger pickup truck, which was eventually scrapped, and access to Nikola's hydrogen fuel cell technology for the development of commercial fuel cell vehicles.
However Nikola's earlier success was short-lived. In Sept 2020, well-known short seller Hindenburg Research published a scathing report about Nikola right after the $2 billion equity investment agreement from GM.
Nikola founder and CEO Trevor Milton was accused of massive fraud surrounding the development of the company's fuel cell technology. As a result, GM backed out of its deal with Nikola in November 2020.
Hindenburg said it collected evidence to show Nikola and CEO Milton made false claims about the company's proprietary hydrogen fuel cell technology in order to form lucrative partnerships with large automakers like GM.
In its detailed report, Hindenburg wrote that Milton had greatly exaggerated the capabilities of the company's hydrogen fuel cell technology and the company did not even have a working prototype as of last year.
In addition, Milton claimed most of its core fuel cell technology was developed in-house. However it was revealed the fuel cells were actually assembled from parts manufactured by third party suppliers, including Bosch.
Milton also said that Nikola secured $14 billion in commercial truck leases from Anheuser Busch and U.S. Express, each of which is a seven-year lease worth about $1 million. He claimed that the volume of orders Nikola received for the Nikola One and Two trucks was so high that it had to stop taking orders. Milton told Forbes in 2019 that Nikola was "sold out for eight years of production."
Hindenburg Research said it was short-selling Nikola stock and labelled the company as a "fraud", a charge that Nikola denied.
"We have never seen this level of deception at a public company, especially of this size," the Hindenburg report warned potential Nikola investors last September.
Milton resigned last September shortly after the report was made public.
In July, Milton was indicted for deceiving investors and is now facing criminal charges for making false and misleading statements about Nikola's fuel cell technology, the U.S. Department of Justice said. Prosecutors in New York charged Milton with two counts of securities fraud and one count of wire fraud over his statements surrounding Nikola's products and technology.
The indictment said that, from Nov 2019 to Sept 2020, Milton defrauded investors into buying Nikola shares by making bold claims about the company's technology and truck development as it sought an IPO.
"Milton lied about nearly every aspect of his business," U.S. Attorney Audrey Strauss in Manhattan said at a news conference.
However, Milton remains the company's largest shareholder with roughly 20% of the Nikola shares outstanding.
In April, Nikola lost a key member of its executive team when Jesse Schneider, executive vice president of technology, hydrogen and fuel cells resigned. Schneider led its engineering teams working on fuel-cell systems, as well as a planned hydrogen-fueling station network and storage technology.
Now Nikola is hoping to turn things around with its fuel cell partnership with Bosch and the leadership of new CEO, Mark Russell, who first joined the company as president in Feb 2019.
The new partnership with Bosch will also support Nikola as demand grows in the shipping industry for zero emissions trucks.
Nikola's stock is trading up just over 1% on Thursday at $10.90.
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