6 ms·

I don't understand Nikola at all. There are so many red flags, yet large credible companies appear to be willing to partner with them and buy from them. I suspe

I don't understand Nikola at all. There are so many red flags, yet large credible companies appear to be willing to partner with them and buy from them. I suspect the terms are probably quite one sided, but even then there's reputation risk for partnering with the next Theranos. I listened to the CEO talk for an hour about their dedicated route hydrogen business model for trucking, and it actually seems like a good idea. The thesis is that 25% of trucks drive back and forth on the same route for their entire lifetime, so you pick the busiest route, build a hydrogen station on it, and sell a bunch of trucks to use it at capacity. This avoids the chicken and egg problem of building thousands of stations everywhere before you can sell your first vehicle. I don't know anything about the industry, and I wouldn't trust their ability to execute, but the plan itself seems sensible. As the renewable grid share increases, there's going to be a bunch of excess capacity at times that can be used very cheaply, meaning the end to end efficiency of hydrogen may not be a deal breaker. Without a multiple of current battery energy density, long range BEV trucking will be tough. Then there's the Badger/GM partnership. They got Iveco to make their trucks, and now they're getting GM to make their pickup. It makes me wonder if their strategy is going to be permanently outsource manufacturing and try to be a Pepsi to Tesla's Coke, partnering with traditional manufacturers which are able to build vehicles technically, but lack the modern sexiness of the new crop of BEV car makers. But if they do pull any of this off, it's going to go down as one of the greatest fake it til you make it examples in modern history. They probably did bullshit their way in to this market cap - I wouldn't be surprised if every word of the short seller report is true. But the market cap does opens doors.

gridlockd 6y ago
The plan still does not make economical sense without massive reductions in the cost of hydrogen or massively more valuable carbon credits. However, if carbon credits become more valuable, synthetic gasoline will become economical as well. Those are all big ifs. As far as I can tell, Nikola is bringing nothing to the table but hot air. No breakthrough in hydrogen production nor batteries nor engines, nothing that existing car makers do not already have.
- cwhiz 6y ago
  We could increase gasoline taxes so that roads, bridges, and tunnels are not falling apart. We could further tax gasoline to offset the emissions damage. Nothing is ever going to seem reasonable so long as we keep comically underpaying for gas at the pump.
  - toomuchtodo 6y ago
    This is unlikely to occur because your average citizen doesn’t believe in paying the full costs of consuming fossil fuels. The only path to success is driving renewables and electric vehicles below the cost of fossil fuels.
    - ashtonkem 6y ago
      It won’t happen because trucking won’t allow it. Practically speaking the vast majority of road damage is done by semi trucks, your average minivan isn’t doing much damage comparatively. Forcing them to pay their fair share for road cost would in effect be ending a multi billion dollar per year subsidy, and would drastically affect the cost of shipped goods for consumers in the short term.
      - toomuchtodo 6y ago
        That too.
- liability 6y ago
  For trucks you'd want synthetic diesel rather than synthetic gasoline. Biodiesel seems better though; AFAIK the feedstocks for synthetic fuels are still fossil fuels (gassified coal or natural gas.)
- reitzensteinm 6y ago
  It doesn't make sense today. But once the grid is mostly renewables, when the wind and sun are at their peak, power is going to be very cheap, and you can run your hydrolysis intermittently to match. An apples to apples comparison to BEV is storing that power in stationary batteries and then charging vehicle batteries from those. I don't know if hydrogen wins that match up, but I don't think it's clear that it doesn't.
tyingq 6y ago
The Badger pickup partnership seems relatively safe for GM. At least the traditional electric one. At the very least they are getting an aesthetically pleasing exterior design and a ready email list of potential buyers. And GM is capable of filling any vaporware gaps. I share your opinion on the hydrogen semi truck though.
- desdiv 6y ago
  >The Badger pickup partnership seems relatively safe for GM. At least the traditional electric one. >At the very least they are getting an aesthetically pleasing exterior design and a ready email list of potential buyers. Is a pickup truck exterior design and a customer list worth the 3 billion in market cap that GM lost since the news broke? GM may not take a monetary damage from dealing with Nikola, but they will still suffer a reputation damage. If and when Nikola folds, GM's management will be seen as hilariously incompetent for not doing the proper due diligence, and the market will price that in accordingly.
  - sokoloff 6y ago
    > Is a pickup truck exterior design and a customer list worth the 3 billion in market cap that GM lost since the news broke? GM closed last week at $30.00. GM closed this week at $30.46. In between those two times, the $NKLA deal was announced on Tuesday and GM shot up a bit. Then Hindenburg published and GM sank to only a small gain on the week. You can’t have GM take the $3B W on the $NKLA news and then complain about the $3B loss that is paired with it when the details are better understood. If a company approached you and offered to give you $2B in shares, $0.7B in capex, and a book of cost-plus orders that uses your technology, how much due diligence is required/appropriate? “GM takes $2B stake in $NKLA” usually means they brought money to the table. In this case, it literally means they were given it and agreed to take it.
    - ogre_codes 6y ago
      I was wondering about the terms of this deal. GM agreeing to provide vehicles to Nikola is a no-brainer. Taking on a stake in the Nikola was the big question mark in my mind. If Nikola gave them the shares, maybe the goal was to give GM a reason to keep Nikola solvent? Now GM has something to lose if Nikola tanks so they might be willing to invest some amount of money or repetitional capital to keep them afloat? Or maybe giving the GM stake was just another smoke and mirrors bit on Nikola's part so they could claim a high profile "investor".
samfisher83 6y ago
This is the next Theranos. Theranos got walgreen and safeway to sign partnerships with them too. US xpress doesn't have the capital to buy the number of truck Nkla is claiming. They don't have a working prototype. Nobody on their Management team seems to have the background to invent a cell that they are claiming. Wish the SEC would do their job before the Milton guy hides all his money.
- deleted 6y ago
  [deleted]
- foobiekr 6y ago
  Theranos showed that so many, many people who should know better, don't: https://www.cleveland.com/healthfit/2015/03/cleveland_clinic_partners_with.html https://www.cleveland.com/healthfit/2015/03/cleveland_clinic...
- CydeWeys 6y ago
  The crazy part is how a hacked-together prototype wouldn't even be that hard for a company the size of Nikola. Trucks already exist. So too do hydrogen fuel cells, electric motors, batteries, and high pressure gas tanks. Just take all those components and hack them together into a working first generation prototype truck, and get some on the road. Tesla did a great job of this in its earliest years on far less funding than Nikola has now. They took existing cars (Lotus Elises) and all they had to do was put in batteries and electric engines. You have to walk before you can run, which Tesla did and Nikola seems to be failing to do. Jumping straight to building an entire truck is lunacy.
  - ashleyn 6y ago
    Counterpoint: Elon, in retrospect, called the Lotus Elise strategy "super dumb." [1] 1: https://www.forbes.com/sites/jeanbaptiste/2018/09/18/elon-musk-converting-lotus-elise-to-build-the-tesla-roadster-was-a-super-dumb-strategy/#b39b12d540fe https://www.forbes.com/sites/jeanbaptiste/2018/09/18/elon-mu...
    - 6y ago
nickik 6y ago
The problem is that even if you assume these hydrogen station can be built for one route, that is still quite a huge investment that you need to make for each route as these hydrogen stations are very expensive. That means you have to find enough costumers on one specific route that all buy into your truck in a very short time-frame. Its basically a very large complex system with solar, hydrogen production, huge hydrogen storage and pumps with sufficient scale to fuel 10-100s of trucks a day. Where will Nikola get the expertise to build such a complex system fuel station system? A company that has basically 0 engineering credibility, is gone set up station like that because that is something that doesn't exist? Hydrogen is difficult enough to deal with for rocket companies, but Nikola is just gone manage all that. To finance such a station you need lots of threw-put, and to have access electricity to fuel 10-100s of trucks every day seem unlikely to me. While access energy might exist on the grid in general, seems to me that enough incredibly cheap electricity right where you need it to fuel 100s of trucks a day is highly unlikely in the near or mid term future at least. If Nikola really want to claim this system is cheaper overall, I would really like to see their numbers on how they get there. Sadly I suspect Nikola has never calculated those numbers with realistic expectation. Energy density in batteries is rapidly increasing, even with current technology large parts of the trucking market can be addressed already. Some part of the longer running routes might just be divided into multi-hop routes. So you are really addressing a shrinking market segment and one that is shrinking because batteries are improving. I see more problems then solutions.
- gruez 6y ago
  >To finance such a station you need lots of threw-put don't you mean throughput?
ashtonkem 6y ago
What drives me insane is that the arguments for hydrogen trucking here is even stronger for building a damn train track. If 25% of trucks are running the same route for their entire life span, then they don’t have to actually be trucks; we are paying for flexibility that we don’t actually need.
- ffggvv 6y ago
  are trains even cheaper? and what about last mile delivery
  - ashtonkem 6y ago
    Across all markets trains cost about 1/3 to deliver goods per ton mile[0]. And that’s before you consider the fact that roads are largely maintained on the public purse, representing a large hidden subsidy to the trucking industry that does the majority of damage to them. The issue is often that we don’t have enough rail, either to handle volume or to enough places. Last mile will have to be trucks, of course. But those short routes are both more variable and shorter, making them easier targets for electrification. It’s the long haul stuff that’s the low hanging fruit here. 0: https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/workingpaper/50049-Freight_Transport_Working_Paper-2.pdf https://www.cbo.gov/sites/default/files/114th-congress-2015-... page 2.
  - bretpiatt 6y ago
    And pipelines are even cheaper (and safer), obviously not everything can go in a pipeline but when it can we'd be much better off doing it that way. https://www.forbes.com/sites/tortoiseinvest/2016/05/13/transporting-oil-why-pipelines-still-rule/ https://www.forbes.com/sites/tortoiseinvest/2016/05/13/trans...
- jcranmer 6y ago
  Trains have a few issues: * Trains have worse geometric constraints: you need larger curves, straighter tracks, longer acceleration/deceleration paths, and lesser grade. It's much harder to add track where none exists already. * For efficiency reasons, trains want to be really long, so trains aren't dispatched until they're long enough to be worth doing so. Consequently, trains tend to be used only when either the source produces craptons of goods (ports, mines) or when there's no issue letting the goods sit around for a long while before a train picks them up (grains).
starfallg 6y ago
>There are so many red flags, yet large credible companies appear to be willing to partner with them and buy from them. Large established companies partnered with Theranos too. The reason being those companies want the hype of the startup brand, and there are limited downsides to them if the startup fails.

gridlockd 6y ago

The plan still does not make economical sense without massive reductions in the cost of hydrogen or massively more valuable carbon credits. However, if carbon credits become more valuable, synthetic gasoline will become economical as well. Those are all big ifs. As far as I can tell, Nikola is bringing nothing to the table but hot air. No breakthrough in hydrogen production nor batteries nor engines, nothing that existing car makers do not already have.

cwhiz 6y ago
We could increase gasoline taxes so that roads, bridges, and tunnels are not falling apart. We could further tax gasoline to offset the emissions damage. Nothing is ever going to seem reasonable so long as we keep comically underpaying for gas at the pump.
- toomuchtodo 6y ago
  This is unlikely to occur because your average citizen doesn’t believe in paying the full costs of consuming fossil fuels. The only path to success is driving renewables and electric vehicles below the cost of fossil fuels.
  - ashtonkem 6y ago
    It won’t happen because trucking won’t allow it. Practically speaking the vast majority of road damage is done by semi trucks, your average minivan isn’t doing much damage comparatively. Forcing them to pay their fair share for road cost would in effect be ending a multi billion dollar per year subsidy, and would drastically affect the cost of shipped goods for consumers in the short term.
    - toomuchtodo 6y ago
      That too.
liability 6y ago
For trucks you'd want synthetic diesel rather than synthetic gasoline. Biodiesel seems better though; AFAIK the feedstocks for synthetic fuels are still fossil fuels (gassified coal or natural gas.)
reitzensteinm 6y ago
It doesn't make sense today. But once the grid is mostly renewables, when the wind and sun are at their peak, power is going to be very cheap, and you can run your hydrolysis intermittently to match. An apples to apples comparison to BEV is storing that power in stationary batteries and then charging vehicle batteries from those. I don't know if hydrogen wins that match up, but I don't think it's clear that it doesn't.

tyingq 6y ago

The Badger pickup partnership seems relatively safe for GM. At least the traditional electric one. At the very least they are getting an aesthetically pleasing exterior design and a ready email list of potential buyers. And GM is capable of filling any vaporware gaps. I share your opinion on the hydrogen semi truck though.

desdiv 6y ago
>The Badger pickup partnership seems relatively safe for GM. At least the traditional electric one. >At the very least they are getting an aesthetically pleasing exterior design and a ready email list of potential buyers. Is a pickup truck exterior design and a customer list worth the 3 billion in market cap that GM lost since the news broke? GM may not take a monetary damage from dealing with Nikola, but they will still suffer a reputation damage. If and when Nikola folds, GM's management will be seen as hilariously incompetent for not doing the proper due diligence, and the market will price that in accordingly.
- sokoloff 6y ago
  > Is a pickup truck exterior design and a customer list worth the 3 billion in market cap that GM lost since the news broke? GM closed last week at $30.00. GM closed this week at $30.46. In between those two times, the $NKLA deal was announced on Tuesday and GM shot up a bit. Then Hindenburg published and GM sank to only a small gain on the week. You can’t have GM take the $3B W on the $NKLA news and then complain about the $3B loss that is paired with it when the details are better understood. If a company approached you and offered to give you $2B in shares, $0.7B in capex, and a book of cost-plus orders that uses your technology, how much due diligence is required/appropriate? “GM takes $2B stake in $NKLA” usually means they brought money to the table. In this case, it literally means they were given it and agreed to take it.
  - ogre_codes 6y ago
    I was wondering about the terms of this deal. GM agreeing to provide vehicles to Nikola is a no-brainer. Taking on a stake in the Nikola was the big question mark in my mind. If Nikola gave them the shares, maybe the goal was to give GM a reason to keep Nikola solvent? Now GM has something to lose if Nikola tanks so they might be willing to invest some amount of money or repetitional capital to keep them afloat? Or maybe giving the GM stake was just another smoke and mirrors bit on Nikola's part so they could claim a high profile "investor".

samfisher83 6y ago

This is the next Theranos. Theranos got walgreen and safeway to sign partnerships with them too. US xpress doesn't have the capital to buy the number of truck Nkla is claiming. They don't have a working prototype. Nobody on their Management team seems to have the background to invent a cell that they are claiming. Wish the SEC would do their job before the Milton guy hides all his money.

deleted 6y ago
[deleted]
foobiekr 6y ago
Theranos showed that so many, many people who should know better, don't: https://www.cleveland.com/healthfit/2015/03/cleveland_clinic_partners_with.html https://www.cleveland.com/healthfit/2015/03/cleveland_clinic...
CydeWeys 6y ago
The crazy part is how a hacked-together prototype wouldn't even be that hard for a company the size of Nikola. Trucks already exist. So too do hydrogen fuel cells, electric motors, batteries, and high pressure gas tanks. Just take all those components and hack them together into a working first generation prototype truck, and get some on the road. Tesla did a great job of this in its earliest years on far less funding than Nikola has now. They took existing cars (Lotus Elises) and all they had to do was put in batteries and electric engines. You have to walk before you can run, which Tesla did and Nikola seems to be failing to do. Jumping straight to building an entire truck is lunacy.
- ashleyn 6y ago
  Counterpoint: Elon, in retrospect, called the Lotus Elise strategy "super dumb." [1] 1: https://www.forbes.com/sites/jeanbaptiste/2018/09/18/elon-musk-converting-lotus-elise-to-build-the-tesla-roadster-was-a-super-dumb-strategy/#b39b12d540fe https://www.forbes.com/sites/jeanbaptiste/2018/09/18/elon-mu...
  - 6y ago

nickik 6y ago

The problem is that even if you assume these hydrogen station can be built for one route, that is still quite a huge investment that you need to make for each route as these hydrogen stations are very expensive. That means you have to find enough costumers on one specific route that all buy into your truck in a very short time-frame. Its basically a very large complex system with solar, hydrogen production, huge hydrogen storage and pumps with sufficient scale to fuel 10-100s of trucks a day. Where will Nikola get the expertise to build such a complex system fuel station system? A company that has basically 0 engineering credibility, is gone set up station like that because that is something that doesn't exist? Hydrogen is difficult enough to deal with for rocket companies, but Nikola is just gone manage all that. To finance such a station you need lots of threw-put, and to have access electricity to fuel 10-100s of trucks every day seem unlikely to me. While access energy might exist on the grid in general, seems to me that enough incredibly cheap electricity right where you need it to fuel 100s of trucks a day is highly unlikely in the near or mid term future at least. If Nikola really want to claim this system is cheaper overall, I would really like to see their numbers on how they get there. Sadly I suspect Nikola has never calculated those numbers with realistic expectation. Energy density in batteries is rapidly increasing, even with current technology large parts of the trucking market can be addressed already. Some part of the longer running routes might just be divided into multi-hop routes. So you are really addressing a shrinking market segment and one that is shrinking because batteries are improving. I see more problems then solutions.

gruez 6y ago
>To finance such a station you need lots of threw-put don't you mean throughput?

ashtonkem 6y ago

What drives me insane is that the arguments for hydrogen trucking here is even stronger for building a damn train track. If 25% of trucks are running the same route for their entire life span, then they don’t have to actually be trucks; we are paying for flexibility that we don’t actually need.

ffggvv 6y ago
are trains even cheaper? and what about last mile delivery
- ashtonkem 6y ago
  Across all markets trains cost about 1/3 to deliver goods per ton mile[0]. And that’s before you consider the fact that roads are largely maintained on the public purse, representing a large hidden subsidy to the trucking industry that does the majority of damage to them. The issue is often that we don’t have enough rail, either to handle volume or to enough places. Last mile will have to be trucks, of course. But those short routes are both more variable and shorter, making them easier targets for electrification. It’s the long haul stuff that’s the low hanging fruit here. 0: https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/workingpaper/50049-Freight_Transport_Working_Paper-2.pdf https://www.cbo.gov/sites/default/files/114th-congress-2015-... page 2.
- bretpiatt 6y ago
  And pipelines are even cheaper (and safer), obviously not everything can go in a pipeline but when it can we'd be much better off doing it that way. https://www.forbes.com/sites/tortoiseinvest/2016/05/13/transporting-oil-why-pipelines-still-rule/ https://www.forbes.com/sites/tortoiseinvest/2016/05/13/trans...
jcranmer 6y ago
Trains have a few issues: * Trains have worse geometric constraints: you need larger curves, straighter tracks, longer acceleration/deceleration paths, and lesser grade. It's much harder to add track where none exists already. * For efficiency reasons, trains want to be really long, so trains aren't dispatched until they're long enough to be worth doing so. Consequently, trains tend to be used only when either the source produces craptons of goods (ports, mines) or when there's no issue letting the goods sit around for a long while before a train picks them up (grains).

starfallg 6y ago

>There are so many red flags, yet large credible companies appear to be willing to partner with them and buy from them. Large established companies partnered with Theranos too. The reason being those companies want the hype of the startup brand, and there are limited downsides to them if the startup fails.