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Startup truck manufacturer Nikola Corp. has secured a commitment of $250 million in funding from CNH Industrial N.V. — a leader in natural gas-powered trucks and buses and the parent company of Iveco trucks — in a move designed to accelerate the use of heavy-duty trucks that use battery-electric and fuel cell technologies in North America and Europe.
CNH — a Dutch company based in London — will be the lead Series D investor as Nikola anticipates raising over $1 billion, granting approximately 25% ownership to new investors and business partners in its latest round of funding, including CNH Industrial.
Iveco and FPT Industrial, the commercial vehicle and powertrain brands of CNH Industrial, respectively, will assist in engineering and manufacturing expertise to produce Nikola’s fuel-cell and battery electric trucks.
Nikola will contribute technologies for a European joint venture with CNH Industrial that will include 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.
“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,” Nikola CEO Trevor Milton said in a company release.
“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,”Milton added.
Phoenix-based Nikola has reported preorders for 14,000 trucks, including a Class 8 sleeper and day cab model as well as a cabover intended for Europe. Nikola’s business model is built around an “all-in” lease for the trucks which includes the vehicle itself, service, maintenance and fuel costs, providing long-term total cost of ownership certainty at or below diesel costs, it says.
“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, CEO, CNH Industrial.
FPT Industrial has been producing alternative propulsion solutions for over two decades, having produced over 40,000 natural gas-powered engines. Iveco is a European leader in natural gas vehicles, with some 28,000 of its trucks and buses powered by FPT Industrial engines. CNH cited fuel cells as the logical next step to liquefied natural gas-(LNG) powered engines.
In related news, CNH reported Sept. 3 it will separate its on-highway (commercial vehicles and powertrain segments) and off-highway assets (agriculture, construction and specialty segments) to create two listed entities.
According to a company statement, the decision follows the completion of a review that highlighted how on-highway and off-highway businesses have diverging regulatory and customer requirements, and are impacted differently by the accelerating industry megatrends of digitalization, automation, low-zero-emission propulsion, and servitization, defined as delivering a service as an added value when providing products to customers.