CNH Investment Deal Boosts Nikola Motor and Hydrogen Transport

| National

Despite strong marketing, a large self-reported order book and important industry partners such as Bosch, hydrogen fuel cell truck developer Nikola Motor still needs to get the trucking industry to take it seriously.Comparisons with Tesla and its location in the notoriously conservative U.S. truck market haven’t helped its position. Still, the recent $1 billion investment round in the Phoenix, Ariz., startup led by London-based CNH Industrial, parent of truck maker IVECO, is an encouraging move. That vote of confidence by a global industry player should temper those who question the ability of Nikola to execute on its business model and introduce hydrogen-fueled heavy-duty trucks.

NIKOLA BENEFITS

Nikola will benefit significantly from production expertise, purchasing power, verified parts and logistics through this new venture. This is a major advantage for Nikola, which is looking to scale and build credible products. Other start-ups may be seeking similar major brand investments. This may spark future tie-ups or consolidation within the start-up space.

CNH Industrial has lagged behind other commercial truck companies with its vehicle electrification development. A fuel cell truck uses an electric powertrain. But it replaces the battery with a fuel cell stack that converts hydrogen into electricity to power the vehicle.

CNH has pursued a strategy focusing on natural gas to meet emission goals. With the increasing number of low and zero-emission zones, particularly in Europe, and ever-tightening regional emission norms, CNH now views electrification as the most viable option for the future. The Nikola investment gives CNH access to a raft of technologies from Nikola that will help jump-start its electrification program.

Notably, Nikola’s advances in software-over-the air and infotainment will give CNH an advantage with regard to vehicle connectivity and intelligence, a coming battleground for commercial vehicle vendors. Nikola, or fleet owners, will add functionality and fix issues remotely. This means less downtime and the ability to add functionality or integrate fleet management directly into the truck. Errors with software are a major cause of vehicles requiring service.