Nikola started its production of electric trucks at its Coolidge, Arizona factory. The company aims to deliver 300-500 semi-trucks this year and the production starts on March 21. As a result of the news, the company shares rose by 15% as it was cheered by Wall Street for starting production as scheduled.
Many electric vehicle makers including legacy automakers such as Ford Motor and General Motors have entered the segment. They aim to deliver their first EVs this year as demand heats up. However, higher raw material prices and supply chain woes have clouded their timelines. The Nikola story has increased credibility now as trucks start to roll off the line, said Jeffrey Kauffman, an analyst at Vertical Research Partners, adding the company could surprise with new customer orders. Nikola expects positive gross margins for its Tre BEV by 2023, which could grow to about 20% after 2025, while in 2022 it expects a negative gross margin of 60% to 75%.
“We got the sense that NKLA has learned a few lessons from other EV companies looking to ramp-up production … Nikola is in touch with suppliers on a daily basis and is continuously discussing and locking-in pricing as volumes rise,” DA Davidson analyst Michael Shlisky said.
Tre Semi-truck
The Tre is a semi with only about 350 miles of range, but the vehicle is intended for shorter logistics routes. Company projections indicate Nikola could deliver between 300 and 500 units in 2022, with a planned ramp in production for more units in 2023, according to CNBC.
As the Tre production continues, Nikola plans to manufacture a hydrogen fuel cell semi that packs nearly 500 miles of range, which would be more suitable for longer routes. In 2025, another fuel cell model with up to 900 miles of range is in the works, suitable for the longest logistics routes across the continent. A hydrogen version of the Tre is “on track” to begin shipping in late 2023, Nikola confirmed during its presentation.
Nikola’s lineup of electric semi-trucks will compete with Tesla’s Semi, which was expected to be delivered to PepsiCo. earlier this year. Neither Tesla nor Pepsi have confirmed any deliveries of the Semi yet, although Tesla stated earlier this year it was still battling cell constraints that would delay the development of future products until 2023. Automakers are going ahead with the deliveries of their production vehicle as the competition gets tougher. Recently the competition for deliveries of electric pickups went high as Rivian was the first company to start electric pickup deliveries. However, the company’s production rate declined and is currently working on increasing production.
