COOLIDGE, Arizona — It is the plant that skeptics said would never be built by a company that would never survive.
Nikola refuted its skeptics on Wednesday, lining up nearly a dozen regular production battery-electric Class 8 trucks for shipment to customers from the first phase of a $600 million plant in the desert between Phoenix and Tucson.
“We’ve been a pre-revenue startup for years,” CEO Mark Russell said at a production launch event. ”We’re now going to be a revenue-producing company, and we will be forevermore.”
The company holds letters of intent and orders for several hundred trucks from major U.S. fleets. They include Covenant Transport, Heniff Transportation Systems and Saia Inc. Total Transportation Services (TTSI) gets VIN No.1 for drayage operations in the ports of Los Angeles and Long Beach, California.
TTSI ordered 100 trucks from Nikola. It continues to amass miles on two pre-series Tre models Nikola provided for testing last December. The current count exceeds 11,000 miles.
14 stations of battery-electric truck assembly
The plant’s 250,000-square-foot first-half phase has 250 employees. More are hired every week as construction continues on an additional 160,000 square feet. A second phase is scheduled for completion in 2023.
“We had drones out here every day,” watching for signs of construction after the July 2020 groundbreaking, said Mark Duchesne, Nikola’s global head of production. “I remember one story that said the phantom company is building a phantom plant. This is real.”
Nikola team members signed the first steel pillar that rose from the ground signifying construction.
“Usually, it is the last pillar that gets signed,” Duchesne said. “We signed the first one because this really is just the beginning.”
The assembly process starts with a steel frame imported from Metalsa in Mexico. Workers add brackets to the frame, followed by air brakes and high-voltage electric hardware before the frame is flipped by a large pulley for remaining components and a cab imported from Madrid to be added. In all, there are 14 assembly stations.
All quality processes are monitored at computer stations within the work cells. The trucks move from station to station on automated guided vehicles until they reach validation and final checks at the end of the line. Other than occasional sounds of hand tools like torque wrenches, the booming sounds of body shop stamping presses are absent.
Nikola might add a body shop later. It will localize cab assembly soon to avoid the continued expense of international shipping, Nikola President Michael Lohscheller said.
A slow production ramp for battery-electric trucks
The production ramp calls for five trucks a day by the end of the year. Nikola plans to make 500 trucks in Coolidge this year followed by the start of production at a joint venture with Iveco in Ulm, Germany, beginning with 2,000 units in 2023. In Coolidge, production is expected to increase to 2,500 trucks in 2023 including a hydrogen fuel cell version of the Tre.
When all three phases of the plant are finished in Coolidge, Nikola will be able to build 20,000 trucks a year on two shifts.
The cabover Tre originally was intended for sale in European markets where roadways and city streets are narrower than in the U.S., creating maneuverability challenges. The turning radius of the Tre belies its size. U.S. fleets indicated their interest a couple of years ago, prompting Nikola to slot the Tre before a hydrogen-powered fuel cell conventional body sleeper cab in 2024.
Adding distance from the past
Nikola stock, which closed Wednesday at $7.46, remains under pressure along with most other electric and autonomous startups that went public via special purpose acquisition companies (SPACs) in the past couple years.
At the launch ceremony attended by Arizona Gov. Doug Ducey, Nikola put more distance between itself and months of brutal negative attention that started with a short seller’s report in September 2020 that claimed Nikola had fabricated many of its technology claims. Founder Trevor Milton faces trial in federal court in New York in July on fraud charges.
Russell, who has replaced Milton as Nikola’s largest shareholder as Milton sold off millions of shares of his one-time dominant ownership stake, avoided any mention of Milton and even the founding of the company in the basement of Milton’s home in Salt Lake City.
That omission was in deference to Ducey, who lured Nikola to Arizona in 2018. He since has brought several electric vehicle makers and battery cell manufacturers to the state.
“Nikola has become a driving force in Arizona’s rapidly expanding electric vehicle industry,” Ducey said after touring the plant. “Nikola is clearly in the driver’s seat of the future of transportation and commerce.”