CNH Industrial, Nikola Announce Strategic Partnership
By Chad Elmore03 September 2019
CNH Industrial N.V. has announced its intention to enter into a strategic and exclusive heavy-duty truck partnership with Nikola Corp., based in Phoenix, Arizona, to accelerate industry transformation toward emission neutrality of Class 8 heavy-duty trucks in North America and Europe through the adoption of fuel-cell technology.
Nikola’s zero-emission trucks, powered by proprietary hydrogen fuel cell and battery technology, are widely expected to be among the first-to-production. The company’s business model foresees an industry-first lease rate that includes vehicle, service, maintenance and fuel costs, providing long-term total cost of ownership certainty at or below diesel costs.
CNH Industrial will take a $250 million strategic stake in Nikola as the lead Series D investor. Pre-money valuation was set at $3 billion. Nikola anticipates raising over $1 billion in the D round, granting approximately 25% ownership to new investors and business partners, including CNH Industrial.
“The increasing focus on the recognition that there needs to be fundamental reductions in automotive emissions is driving our industry to rapidly seek advanced technological solutions. Iveco is now ideally placed to offer customers an even wider range of transport solutions including natural gas, electric and fuel-cell powered vehicles,” said Hubertus Mühlhäuser, Chief Executive Officer, CNH Industrial. “Nikola’s choice of Iveco as its strategic partner is testament to our internationally recognized excellence in heavy duty trucks and alternative powertrain technologies.”
Iveco and FPT Industrial, the commercial vehicle and powertrain brands of CNH Industrial respectively, will assist in engineering and manufacturing expertise to industrialize Nikola’s fuel-cell and battery electric trucks. The following vehicles will benefit from this partnership: the Nikola One, a NAFTA- compliant Class 8 sleeper truck; the Nikola Two, a NAFTA-compliant Class 8 day-cab truck; and the Nikola Tre, a European compliant cab-over truck.
Nikola will contribute technologies for a European JV with CNH Industrial that will include class-leading fuel-cell expertise, e-axles, inverters, independent suspension, on-board hydrogen fuel storage, over-the-air software update functionality, infotainment, vehicle controls, vehicle-to-station communication protocols, power electronics, and access to a hydrogen fueling network.
FPT Industrial has produced over 40,000 natural gas-powered engines to date. Iveco has produced 28,000 trucks and buses that use FPT Industrial natural gas engines. The companies have been instrumental in the development and expansion of Europe’s natural gas refueling network, in addition to introducing new powertrain technology. Following a similar path, Nikola is actively working with partners to develop the required hydrogen refueling infrastructure in North America and Europe.
Strategic near-term project milestones include the industrialization of the Nikola Two fuel cell-powered Class 8 truck for the North American market, as well as the integration of Iveco S-Way truck technology into the battery-electric powered Tre cab-over model for both the North American and European markets.
“The time has come to finally provide a zero-emission solution to the heavy-duty truck market. While other OEMs believe zero-emission solutions cannot happen in the timeframe regulators have mandated, Nikola, FPT Industrial and Iveco are proving that these timelines are not unreasonable,” said Trevor Milton, Chief Executive Officer, Nikola Corp. “Nikola has the technology but needs a partner with a European network to achieve it in a timely manner. With CNH Industrial’s investment and partnership, we can now bring zero-emission trucks to Europe. It is exciting to see Iveco taking the lead in providing zero-emission solutions in Europe through its partnership with Nikola. By bringing CNH Industrial on board, we now have access to manufacturing know-how, purchasing power, validated truck parts, plant engineering and much more. Few will doubt our ability to commercialize a truck now.”
In the long-term, a European joint-venture will cover both battery electric vehicles (BEV) and fuel-cell electric vehicles (FCEV) expected to be launched by Q4 2022. Nikola plans to leverage Iveco’s European sales, service and warranty channels to accelerate access to the European market.
“Global climate change, geopolitical conflicts, future availability of fossil fuels and a self-aware circular economy all call for a fundamental change in how we operate,” said Gerrit Marx, President Commercial and Specialty Vehicles, CNH Industrial. “While today LNG delivers significantly lower well-to-wheel emissions, which can be reduced to virtually zero when using biogas, in the medium to long-term, fuel-cell and BEV technologies will deliver the ultimate goal of zero-emission trucking. With our LNG technology we have proven to be European disruptors, taking the lead in industry transformations including fuel supply and lifecycle ownership.”