Electric Truck Startup Nikola Motors Claims $2.3 Billion in Preorders Before Prototype Is Even Ready

If $2.3 billion in preorders for a nonexistent hybrid electric semi truck sounds far fetched, that's because it is

3 min read
Electric Truck Startup Nikola Motors Claims $2.3 Billion in Preorders Before Prototype Is Even Ready
Photo: Nikola Motor Co.

In May, Nikola Motors made two big announcements: The first was that it existed, and the second was that it was developing a US $375,000 hybrid electric semi truck called the Nikola One. The company promised that the truck, powered by lithium battery packs and a compressed natural gas generator, would be better than the current generation of semi trucks in every single way. Nikola said it would best its competitors in terms of power, efficiency, weight, speed, safety, cost of ownership, and durability. What’s more, the Nikola Motors team said, there would be a curved 4K TV in the sleeper cab in the back. Each Nikola One will cost $5,000 per month, but maintenance and fuel will be included at no additional cost for the first 1.6 million kilometers. This, says Nikola, will make it an attractive financial proposition for owners and operators.

With some mediocre digital renderings and this impressive list of specs, Nikola Motors opened up preorders. Yesterday, the company put out a press release saying that it had managed to generate “$2.3 billion in pre-sales in the first month” for a truck that doesn't even exist in prototype form, and won't be revealed to the public until December. So how'd Nikola manage to fill its coffers with a ten-figure haul from prospective buyers? Simple: Strictly speaking, it didn't.

First, a few things worth pointing out about the Nikola One: It’s not really an “electric” semi truck in the same sense that a Tesla is an electric car. The Nikola One is powered by fossil fuels (primarily compressed natural gas, although any liquid fuel will do) that drive a 400 kilowatt turbine to generate electricity onboard. That electricity is fed into a 320 kilowatt-hour battery pack (triple the size of the pack in a Tesla Model S P90D), from which the electric motors at the truck's wheels draw current. The truck’s fuel efficiency ranges from 29.4 to 19.6 liters per 100 km (between 8 and 12 mpg). It’s tank can store 379 liters (100 gallons), yielding its advertised 1,930-km (1,200 mile) maximum range. Without the generator, a full battery pack provides enough energy to propel the truck for as much as 320 km, depending on the load. If you want to, you can plug the truck into a wall to charge its battery pack that way, but the practical design of the Nikola One is really based around the turbine. 

There are certainly advantages to using a hybrid turbine electric system like this. The powertrain itself is much smaller and lighter than a comparable diesel engine would be, with very few moving parts, so it’s easier to maintain. Being able to use a variety of different fuels is an obvious plus. Turbine efficiency can be poor if operating outside of its optimal RPM, but by using the battery pack as a buffer, the Nikola One can ensure that its turbine runs only as necessary (Nikola estimates about one hour out of every three of driving), and when it does so, only at peak efficiency. 

The biggest problem with running a vehicle that uses compressed natural gas for fuel is finding natural gas filling stations, but Nikola Motors has “plans” for 55 “strategically positioned” CNG stations across the United States and Canada—about one for every 800-kilometer stretch of road along popular trucking routes. Nikola says it will supply these stations using its own natural gas wells, allowing it to pump out “millions of gallons of clean natural gas each day.” 

As you might expect from a startup, all of this stuff sounds pretty great. But we're obligated to point out that there are a lot of grand plans but little in the way of execution. Furthermore, this level of hype always makes us vaguely suspicious, especially when the one number that we can actually fact check, the preorder amount, is at best confusing and at worst deceptive. That “$2.3 billion in presales” refers to 7,000(ish) deposits to reserve a truck worth approximately $375,000. But each deposit is a fully refundable $1,500—not the full $375,000—meaning that Nikola Motors has received slightly over $10 million. It's a significant amount of money, but that $2.3 billion isn't really meaningful at this point.

Nikola Motors says that it will unveil the Nikola One prototype on 2 December in Salt Lake City, Utah. And if it's everything Nikola Motors says it is (or even mostly everything), we'll certainly be impressed. Technology like this could be an enormous benefit for the trucking industry. However, as with all things that seem just a little bit too good, we'll be reserving our judgement and excitement until Nikola manages to deliver on its promises.

The Conversation (0)