Nikola – Ryder Trucks Partnership: A Vision for the Future

Despite earlier press releases announcing a partnership between Nikola and Ryder Trucks, the commercial truck industry was both surprised and fascinated to discover that the new start-up electric truck manufacturer and the global truck rental company would be sharing a booth at the CES 2020 show in Las Vegas.

I believe we are witnessing a major potential piece of the jigsaw, which has otherwise been missing up to now in the delivery of a product started from a blank sheet of paper into a practical, useable and operational road transport solution. So there’s not much to live up to!

It’s not a complete solution as there are other issues to be overcome, but isn’t there always and it would be no fun if everything was easy, but as the obstacles appear you have to have the vision, knowledge and resource (financially and operationally) to overcome them.

I have seen this with Trevor Milton and his Nikola team in which everyone I have met have been impressive, not necessarily in their understanding of the commercial vehicle knowledge but in attitude and business acumen as well as a full understanding of fuel cell technology.

A great example of their business acumen has been recently shown with their ‘partnerships’ especially CNH the industrial (basically non-passenger car) umbrella company for Fiat, which of course includes amongst others, Iveco.

The deal includes money but perhaps more importantly for Nikola also offers access to the products, services and ‘know-how’ from a traditional builder of trucks, with a global brand and network.

In fact, the first ‘cab-over’ style TRE tractor unit is based around the recently launched Iveco “S-Way” will be on European shores perhaps sooner than many assumed, with low level volumes over the next 3 / 5 years.

Of course, there are also two versions of the more traditional US variant a sleeper cab with Fuel Cell (One)and a day cab (Two) with a battery and fuel-cell mixture for the short, regional style operation.

The Nikola team acknowledge both sides of the Atlantic need to be marketplaces for their truck to achieve economies of scale, and the same conclusion has been reached by many of the traditional players – take Daimler Trucks, Volvo Trucks and Traton as great examples.

Another area of interest has to the repair, maintenance and residual value leasing of a product which is unproven and traditional corporates would be hesitant – ok, terrified – fixing a residual value on what is effectively a research and development product.

Leasing or contract hire – whichever word you wish to use, and purists will no doubt point out the difference(!) – is one of the major ways operators acquire heavy trucks nowadays on both sides of the Atlantic and therefore controlling an effective and vibrant residual value is the key to success particularly for an unproven lifecycle product.

Apologies Nikola, but it’s true.

Yes, Nikola has its own unique leasing package which offers a new Nikola truck every 700,000 miles or 84 months whichever comes first but in today’s fast-changing market, financial flexibility is one of the keys to success.

Ryder has to be admired for grasping this golden opportunity. I believe it’s a huge opening for the rental company; to be directly involved at the beginning of a very important step in heavy truck alternative fuel development.

The company’s skills in repairing, maintaining and leasing with a depot and branch infrastructure (no fewer than 800 in the US) and rental outlets will be a valuable resource, just as valuable as CNH’s contribution if its managed well.

Of course, no discussion involving Nikola cannot be complete without mentioning fuel cell technology or rather hydrogen production infrastructure.

I was lucky enough to have a brilliant 15 minute discussion with one of the senior management team whose job it is to develop the on highway hydrogen infrastructure and its clear Nikola are into the ‘meat of the issue’ in localised hydrogen production and have highlighted the key problem areas as well as some potential solutions but there’s still a way to go.

It has a partnership with NEL of Norway to help deliver over 700 hydrogen station by 2028 and considering we are in 2020 already that’s a demanding goal even for Nikola.

This leaves traditional heavy truck manufacturers on both sides of the Atlantic at an interesting (perhaps they may use a different adjective) crossroads; LNG or Fuel Cell for long-haul distribution or both in different operational scenarios – but that discussion is for another article!

Tim Campbell is the Managing Director of Campbells Consultancy, a globally-renowned consultancy company dedicated to the electrification of the commercial vehicle industry and publishers of Electric Van & Truck. 

You may contact Tim by telephone (+44 1772 286225) or email (tim@campbellsconsultancy.com) or, alternatively, visit his company’s website (www.campbellsconsultancy.com).

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