CEO Max Fuller says controlling fuel, maintenance costs are major drawsU.S. Xpress believes the Nikola Motor’s Nikola One hydrogen-electric truck can stabilize volatile fuel prices and provide a fixed cost for its fleet.
The truck may look futuristic, but to Max Fuller, it’s benefits are anything but. Fuller, founder, chairman & CEO of U.S. Xpress, says the Nikola One tractor from Salt Lake City-based Nikola Motors represents a potential operational advantage for those that buy in to the idea of a hydrogen-powered electric truck.
Count Fuller and U.S. Xpress among them.
“There’s an intersect here in the next five or six years where battery technology may overtake diesel [in operational cost],” Fuller tells FreightWaves, explaining that the Nikola One truck could represent a 30% to 50% cost reduction per truck for his fleet. “[Nikola’s] providing the fuel, so I’ve got a fixed cost, whereas the price of diesel is volatile. The incentive is to get out of the whole diesel volatility cycle. It really is something we can’t control but it impacts our bottom line greatly.”
Nikola Motor is promising to provide 1 million miles of hydrogen fuel, plus maintenance, tires and some ancillary items such as truck washes as part of a monthly lease program that will range from $5,000 to $7,000. Fleets and owner-operators can also choose to purchase the truck and those items will still be covered, says Trevor Milton, founder & CEO.
To Fuller, that kind of cost control is potentially a big win for his fleet. Still, there is risk. Hydrogen-powered Class 8 tractors are an unknown, starting with a fueling infrastructure that is nearly nonexistent at this point.
For Fuller, hydrogen-electric power is another in a long line of technologies U.S. Xpress has been among the first to try and in many cases adopt. That list includes Qualcomm navigation, collision avoidance systems, automated manual transmissions, roll stability control, and satellite navigation. By most accounts, like Milton, Fuller can be declared a visionary.
“I don’t have a problem [trying] a new technology because we’ve done it enough, and we have a thorough validation process; some products don’t make it through,” says Fuller. “But this is such a major game-changer for the industry. One of the biggest problems is [fuel price] volatility, and this will help stabilize that.”
Still, he wasn’t without some skepticism before signing on to the Nikola One project.
“I spent about six hours with Trevor and I kept probing the issues,” Fuller relates. “The guy understands what he is doing. He may not understand trucking, but he understands batteries and technologies. I don’t have any investment in this, I just like what he’s doing and want to help him along the way.
“Operational cost, productivity, driver acceptance [are among some of the ways U.S. Xpress will validate the truck],” Fuller continues. “There are a number points, and if there are weaknesses, we’ll point those out. Trevor has been very good about [listening] and working with us.”
Having U.S. Xpress, the second largest privately held transportation company with more than 7,000 trucks and 19,000 trailers, and Ryder System, which will provide maintenance, sales and distribution of Nikola One (sleeper) and Nikola Two (day cab) upon launch in 2021, on board is a big boost for Nikola Motor, but Milton says the vehicles and services will sell themselves.
“Our business model makes sense for anyone who drives full time,” Milton says. “They will save 30% on every truck they own.”
On-road testing is set to begin later in 2018, Milton says.
Beyond the viability of the trucks themselves, the big question is where a driver is going to get hydrogen fuel. Milton says Nikola plans to open 35 hydrogen stations per year with an eventual national network of 364 stations.
Fuller likens the infrastructure build-out to that of natural gas. Initially, few stations were available, but that quickly grew as demand increased. With Ryder and its 800-plus facility network on board, the hydrogen infrastructure could grow just as quickly.
As to demand for such a truck, Milton says Nikola has over $4 billion in reservations so far. “We’re booked out for many years and Ryder hasn’t even started selling the truck yet,” he says. “I’m really anxious, but regardless of who builds a truck like this, it takes 4 to 8 years to develop.”