A hydrogen-powered Nikola Tre semi-trailer truck is refueled at one of the company’s mobile fueling stations in Long Beach, California.
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Nikola has had a rough few years as it tried to survive the reputational damage and stock price crash caused by its founder’s lies (which landed him a four-year prison sentence). Nikola had to recall hundreds of its first electric semi-trucks to fix batteries that were prone to catching fire. But since the company began delivering hydrogen-powered semi-trucks late last year, things have started to turn around.
“It’s a good truck. The feedback from drivers, the fit and finish are just outstanding,” said Jim Gillis, Pacific region president of trucking company IMC, which uses hundreds of semi-trailers to haul thousands of loads in and out of the ports of Los Angeles and Long Beach every day. “In our fleet, it’s referred to as the Bentley of trucks.”
“In our fleet it is known as the Bentley of trucks.”
Collierville, Tennessee-based IMC, which specializes in moving cargo between ports and warehouses, is among Nikola’s first and best customers. The company currently operates 50 of its hydrogen TRE FCEV trucks and has ordered 50 more. And even drivers who are wary of the truck’s old-fashioned “cab-over” chassis are quickly getting on board, he said. Forbes.
“When you put a driver in front of it for the first time, that whole cab-over design that looks a bit like a truck from the late ’70s or early ’80s, they’re very apprehensive. But once they get in it and take a drive, they don’t want to go back. The user experience is just great.”
Drivers love it because the Nikola model is much quieter than the roar of a diesel semi and lacks its characteristic vibrations—and dirty exhaust fumes. The hydrogen truck also uses regenerative brakes that absorb friction during stopping and deceleration, so even the loud noise of conventional trucks’ air brakes disappears. It has nearly twice the range of a battery-powered semi and, crucially, refueling takes about 20 minutes compared to hours from a plug. But there’s a downside: Because this propulsion technology is so new, there’s virtually no refueling infrastructure yet, and the cost of hydrogen fuel is at least twice that of diesel fuel.
The interior of Nikolas Tre FCEV
Nikola Corp.
To keep IMC’s trucks moving, Nikola is operating two temporary stations — essentially tankers set up in parking lots — near the sprawling ports of Long Beach and near warehouse networks in Ontario, Calif. A third mobile station opened Monday in Santa Fe Springs, halfway between the first two. Nikola’s customers in the San Francisco Bay Area can fill up at a fixed True Zero station operated by First Element, a private company that operates about 50 hydrogen stations across California, serving drivers of fuel cell cars like Toyota’s Mirai sedan and Hyundai’s Nexo SUV. As truck volumes grow, Nikola plans to build fixed stations over the next year or two where demand is highest, using grant money from California. The company is also attracting interest in Canada, where Walmart just started putting a Tre FCEV into service near Toronto. Last month, Nikola opened its first mobile Canadian station in Etobicoke, Ontario.
Hydrogen prices are currently high, but fuel availability, which has historically been a challenge for California’s fuel cell car market, is not a problem, said Nikola’s CEO Steve Girsky Forbes.
“We’re not worried about hydrogen supply in the next six months. Frankly, we think there’s an oversupply right now,” he said. “It’s not costing the amount we’d like, but it’s part of building a coalition of partners.”
One of IMC’s Tre FCEV
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This coalition will probably also include vehicle manufacturers and energy companies. Girsky declined to say whether Toyota, Hyundai and Daimler, which are currently preparing to sell their own hydrogen-powered semi-trailers, are among them.
Nikola got some much-needed good news on Aug. 9, when the Phoenix-based company reported its best quarterly revenue yet: $31.3 million, more than double the year-ago figure, thanks to better-than-expected growth in hydrogen truck sales. Still, the company is far from profitable, losing $133.6 million in the second quarter. The quarterly results sent Nikola stock soaring on Friday before it ended the day up 8.2%. Shares were down about 5% on Monday.
On the company’s earnings call, Girsky noted that interest in the company’s hydrogen semi-trucks is increasing. However, he did not provide an updated delivery forecast for the year, sticking with the projection of up to 350 trucks in 2024. A total of 72 trucks were delivered in the second quarter, above the company’s forecast of 60.
“We are not only receiving more calls from fleets interested in deploying fuel cell trucks, but also from strategic partners such as automakers, suppliers, hydrogen producers and major energy companies who recognize our role as pioneers in the hydrogen economy,” he said.
Discounts in California
California is the largest auto market in the US and has long been a hotspot for battery- and hydrogen-powered vehicles – thanks in part to the country’s strictest emissions regulations. Tens of thousands of trucks also transport goods in and out of the huge ports in Southern California and Oakland.
Hydrogen trucks can cost more than twice as much as a diesel model—Nikola’s costs $390,000. But the government also subsidizes them and pushes long-haul drivers to opt for greener vehicles by offering government rebates of up to $240,000 per truck. The 387 hydrogen truck rebate vouchers issued so far have mostly gone to Nikola, although models from Hyundai and startup Hyzon are also eligible for the incentive, according to the California Air Resources Board. The incentives are funded by revenue from the state’s sale of carbon credits.
By the end of the second quarter, Nikola had delivered just 147 hydrogen trucks to customers. But Girsky, a former General Motors vice president and longtime financial analyst, estimates that almost all of the hydrogen truck discount vouchers issued will go to its own customers, who will receive most of the deliveries throughout the year.
“We are 99 percent of all hydrogen producers. But what is important is that the number of outstanding vouchers for hydrogen exceeds that for batteries,” he said. “A voucher gives you the right, but not the obligation, to buy trucks. It’s like a reservation. But the fact is that there is interest in hydrogen and we want to be there to supply it.”
“With more scale and more volume, the cost of the truck will go down. And with more volume, the cost of fuel will go down because the tankers are not efficient right now.”
That’s because the actual usable range of hydrogen trucks is at least twice that of battery models, including Nikola’s own Tre BEV. “If you’re hauling potato chips around town, a battery truck will serve you well. If you want to haul cases of beer long distances, you’ll need something more.”
The big challenge for Nikola is to find the capital needed to continue expanding production and building filling stations until the number of hydrogen trucks reaches critical mass.
“With more scale and more volume, the cost of the truck will go down. And with more volume, the cost of the fuel will go down because the tank facilities are not efficient right now,” Girsky said. “The more volume that goes through them, the more efficient they become. It’s not where it needs to be yet, but it’s important to have visibility into where it could be.”
He and other hydrogen advocates hope that cost parity with fossil fuels could be achieved, but without the carbon dioxide emissions.
Hydrogen Hub
If Nikola survives the next few years, the company could benefit from unprecedented federal spending designed to increase clean hydrogen production and distribution in the U.S. That funding comes from the Inflation Reduction Act. Aside from spending on truck rebates, California received $1.2 billion from the Department of Energy for its ARCHES H2 hydrogen hub project and has a number of projects in the works to use the fuel to decarbonize heavy industry and put cleaner trucks and buses on the road.
By 2030, federal funds will help the Golden State increase production of clean hydrogen – made primarily by splitting water with electricity from renewable energy sources – to 500 tons per day and keep at least 60 high-capacity hydrogen fueling stations in operation to power 5,000 fuel cell trucks and 1,000 buses.
For his part, IMC’s Gillis is quite happy with his hydrogen truck fleet — which is more than six times the size of the eight battery-powered semi-trucks he operates near Southern California ports. Aside from the shorter range they offer, installing high-power charging stations that battery trucks require is a challenge, he said. But even with better range and faster refueling, hydrogen isn’t perfect right now.
“Zero-emission trucks have some hurdles, particularly because of the weight of the vehicle, which impacts the volume of cargo we can haul,” he said. “But I think for the majority of the cargo we haul in Southern California, this technology works.”
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