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Nikola's Light Fades - a bit

Updated: Aug 24, 2021

Nikola TRE appears to use European driveline, while the TWO will now use GM Fuel-Cells

The latest deal announced overnight with General Motors was expected to boost the stock price and accelerate Nikola's progress towards release and production of its self-vaunted global fuel cell technological leadership. One US business commentator has noted - "The new agreement is a nonbinding memorandum of understanding that doesn't expire until the end of 2021, the companies said. It is subject to negotiations and a definitive deal."

Instead, the previous deal to produce the Badger ute has been cancelled, GM will no longer take up its entitlement of Nikola shares, and the new deal means GM reverts to a virtually supplier-only mode. Nikola shares plummeted 27% on NASDAQ, and even GM took a 2-3% hit.

Commentators in the US seem to be ignoring the main question. If Nikola is indeed the global leader in fuel-cell powertrain development that it claims, why is the GM deal for the supply of GM's own fuel-cell systems for Nikola's class 7 and class 8 heavy-duty trucks, the very products it has trumpeted as the hydrogen solution? What’s happened to the hydrogen fuel cell R&D that Nikola, and especially its founder Trevor Milton has announced is leading the world?

Exactly how much of the Nikola truck is Nikola? And those components have yet to be tested and proved in commercial applications.

I contacted Nikola to put these questions to them, and asked for comments. They referred me to a press release issued on 30 September:

In relation to the TRE - "Nikola has engineered, in conjunction with its business partners and suppliers, the electrification elements of the Nikola Tre. During this process, Nikola engineers have taken the lead on the Human Machine Interface, infotainment, battery pack engineering and integration into the e-propulsion architecture, vehicle thermal management, and the e-axles. The vehicle controls architecture has been developed solely by Nikola. For the balance of the Tre BEV, Nikola leverages validated and homologated IVECO components to drive cost efficiencies.

Bosch's rotor, stator and inverter products and related expertise, and FPT Industrial’s industrialization expertise and experience, have enabled Nikola to move quickly on an aggressive path to bring its electric truck e-axles to market."

As far as the Nikola TWO Fuel Cell truck goes - "Bosch has been instrumental in helping to integrate heavy-duty fuel-cell power modules into Nikola trucks. Nikola is defining and engineering the architecture of the truck, vehicle technical specifications, features and functions, and styling theme."

The Bosch link for the TRE now needs to be considered in the light of today's announcement of GM fuel-cell system supply.

In either case, the pathway for Nikola is, by it own statements, quite different from the initial public announcements which indicated the company was going to be the global leader in hydrogen fuel-dell design and development for heavy-duty trucks.

At least the marketplace - and investors - are now aware that Nikola is actively utilising external technology leaders to navigate its passage to series production.

Looking closely at the above, it seems that Nikola's technological involvement in the TRE and TWO can perhaps be described as superficial, given the overall complexity of present and near-future heavy-duty truck construction technology, and the weight of the Bosch, Iveco and now GM supply arrangements.

No reasonable person wants to see failure in this field, so here's hoping they can pull it off.

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