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Nikola Founder Trevor Milton on competing with Tesla, going public pre-revenue & more | E1090 — Transcript

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0:59Hey everybody here. Everybody welcome to
1:01This Week in Startups, and I'm really
1:03excited about today's episode because
1:05brings together a lot of the topics
1:07we've been talking about on this very
1:09podcast for the last decade. As we all
1:11know, private companies have been
1:13staying private for a long time. And my
1:16friend Bill Gurley was saying, "Hey,
1:18maybe companies are staying private too
1:20long. Airbnb may have missed their
1:22window going public." And then you had
1:24Uber, which took 10 years. Ultimately,
1:26maybe worth it, or maybe there are some
1:28criticism that the retail investors
1:30didn't have a big enough lift. Then, you
1:32have my other bestie, Chamath, doing
1:35SPACs for Virgin Galactic, and SPACs
1:38becoming very popular. Special purpose
1:40vehicles acquisition
1:42companies and reverse mergers. Then,
1:46retail investors getting involved in the
1:48stock market again. We never thought
1:49we'd see that. I invested in a little
1:51company that wanted to make stocks
1:55freely tradable with no commissions
1:56called Robinhood. And now that company's
1:59got over 10 million users and retail
2:01investors have gotten involved in the
2:03market. Now, layer on top of that the
2:06battle for getting off of carbon,
2:09perhaps the most important battle of our
2:11lifetime.
2:12The biggest existential crisis, if you
2:14ask anybody, is
2:17global warming.
2:18Or maybe China and communism taking over
2:22the planet. Hmm, it's kind of a toss-up
2:24for me. These are things that we
2:25certainly should worry about. And the
2:27phenomenal success of Tesla.
2:30Uh
2:31Uh the founder of Nikola Motors is with
2:33us today. They are a company
2:36that went pri- that was private for
2:38about 5 years, I believe. And they went
2:40public through a SPAC. And they have a
2:42massive number of retail investors who
2:44are speculating on the company as uh one
2:47does when they buy a company pre-launch.
2:49This is a company that has not launched
2:51their products yet. So, of course,
2:52they've gotten that criticism. Should a
2:54company go public if the product is not
2:56out yet? The last time we saw that was
2:59the dot-com boom, right? And I've got
3:00some scar tissue from that. So, welcome
3:02to the progra- uh program, Trevor
3:05Milton, the um
3:07Now, you're the the founder and chair
3:09executive chair, correct? Of Nikola. And
3:11you had your friend um
3:14and colleague take over the president
3:16CEO slot, correct?
3:17Yep. Yep. Well, thanks for having me.
3:19So, you heard my little preamble. You've
3:20had a heck of a ride. And so, there's
3:23many different places to start with the
3:24story of Nikola. But, you know, I'd like
3:27to start with um what is the product
3:30that you are trying to create in the
3:32world or products? And why is that
3:35important to you?
3:36Yeah, I mean, it has been a a pretty cr-
3:38a pretty crazy incredible ride getting
3:40here. We We were We were private for um
3:42you know, for
3:44And a lot of people ask, you know, why
3:45did you go public? Well, mainly it was
3:47because of WeWork. Once WeWork came
3:49around, they kind of there was a big
3:50glass house, the crack started coming,
3:52and the whole thing fell down overnight.
3:54And you know, they wanted to they wanted
3:56to see our entire business model. When
3:57investors prior to WeWork, investors
3:59would come in and invest a lot of money
4:00and it was you would just should sell
4:02them on the vision that they'd hire
4:04McKinsey to analyze your business and
4:06they'd get the sign off and they'd make
4:07the investment. Once WeWork came along,
4:09ultimately the next question was what
4:11makes you not the next WeWork? So the
4:13discussion totally changed and it became
4:15a problem. So we wanted to we wanted to
4:17show everyone when you when you go
4:19public, you you show them everything.
4:20You they get to see your books, the
4:22money, every contract, every related
4:24party transaction. They get to see
4:26everything. And ultimately what that did
4:28is it brought a lot of confidence to the
4:30investors around Nikola. So what is
4:32Nikola? We are a zero emission
4:36OEM, original equipment manufacturer,
4:37building very big
4:40zero emission semi trucks. But I would
4:42tell everyone we're not really just a
4:43truck builder, we're actually a
4:45technology
4:46infrastructure play.
4:48And the why is that? It's because we
4:49don't make money necessarily on the
4:50trucks, we make money on the on the
4:52infrastructure, the hydrogen. So if you
4:54think about a diesel truck, when you buy
4:55a diesel right now, say a brand new
4:57Peterbilt, you know, big semi truck,
4:59you're going to pay 150,000 for the for
5:01the diesel truck and then you'll pay
5:03about a million dollars-ish for the for
5:05the fuel for that truck.
5:07So the big problem with that is is the
5:09oil companies make all the money. So we
5:11came in we said look, we want to take
5:12all that money from the oil companies,
5:13bring it into Nikola.
5:15And when you buy our truck, we cover the
5:17cost of your truck, your service, your
5:19warranty, your maintenance and your
5:21hydrogen,
5:22hydrogen fuel cost. And so now someone
5:24just pays us per mile to drive it,
5:26that's it. They never have to worry
5:27about any other variable.
5:29And we've been incredibly successful,
5:31over 10 billion dollars in pre-order
5:32reservations, an 800 million dollar
5:34order with Anheuser-Busch, 13 routes
5:37coming for their distribution centers
5:38we're using our trucks and our our
5:39business model.
5:41And you know, we've had a wild ride. I
5:42mean we went public and it you know,
5:44it's a it's been a wild ride. It's very
5:47difficult being public. I'll be honest,
5:48very difficult. But, we got a lot of
5:50great things ahead of us and that's
5:51always fun to see.
5:52Yeah, and so this is what makes it a
5:54challenging, I think, interview is
5:56because there's so much to talk about
5:58here. Just pausing for 1 second on
6:00something you said in terms of your
6:01inspiration, WeWork um
6:05was instructive to you because they had
6:08closed opaque books for such a long time
6:11that their problems festered until the
6:13point that they became existential and
6:15killed the company, essentially. And
6:18your position is, "Hey, if that company
6:19had been public earlier, all of that
6:22sunlight would have come in and
6:23disinfected everything and they would
6:25not have been involved in such crazy
6:27shenanigans." Correct? Am I summing that
6:28up?
6:29Uh you could not have summed that up
6:30better. Honestly,
6:32he had They had so much control over
6:33there that it was unhealthy. And so,
6:35people people even asked me, they said,
6:37"Hey, why are you not the CEO anymore?
6:38Why are you the executive chairman and
6:40why are you you know, you're the
6:41founder?" And it's for that exact
6:43reason. So, that I didn't want that much
6:45control. It's a It's unhealthy for an
6:47organization to have a dictator.
6:49And so, what I I'm the executive
6:51chairman, the CEO reports to me,
6:53but there is a very qualified, great
6:57friend of mine who's a who His name is
6:58Mark Russell. He was the president of of
7:00a publicly traded company called
7:02Worthington Industries and he's our CEO
7:05now. And so, what that does, it allows
7:06you to have more than one voice in the
7:07boardroom. Allows you to have more than
7:09one opinion. You're not drinking your
7:11own Kool-Aid.
7:12Now, this is interesting as a debate as
7:14interesting as a debate point, I think,
7:16the other side of the argument, and I'm
7:18not taking this side of the argument,
7:19but just to present both sides, the the
7:22dictator
7:23uh in the case of Google, Facebook,
7:26Amazon uh have created the largest
7:28companies in the world and they have
7:30control over their company. So, on one
7:33side, we have the WeWork example being
7:35super instructive. The dictator god king
7:38on that side uh destroyed the company.
7:41Uh and then on other ones we've seen the
7:43largest companies be built. So, in
7:46fairness, the sample set shows both
7:48possibilities, correct?
7:50It does, but here's the difference. So,
7:51in in the WeWork example, they had full
7:53control of everything, the board and the
7:55dictatorship and the direction of the
7:57company. If you look at these other ones
7:58like Google or Facebook or or other
8:00ones, you have someone who has a lot of
8:02power, which would be similar to me
8:04where I control the I control the board,
8:06so I can make whatever I want to get
8:08through I can get through if I really
8:09want to. But, the difference is is you
8:11have an objective board that helps
8:12balance.
8:14And so, there was never that at WeWork.
8:15And they didn't The public didn't know
8:17this. So, when they like you said, when
8:18what happened is you had all these years
8:19of crazy things going on,
8:21and then when they start to go public,
8:23everything comes out in one shot and
8:24it's like, "Oh my gosh, this is a This
8:27is a problem." But, if they would have
8:28been publicly traded, they would have
8:29been more methodical about it. A prime
8:31example is inner party related
8:33transactions. I Everything I do I have
8:35to make sure it at the board understands
8:37what it is, why it is, is it connected,
8:40make sure it doesn't have a conflict of
8:41interest. And so, I When you run your
8:43own private company, you don't give a
8:44crap about that.
8:45You just Whatever you
8:46because it becomes fatal. I mean, I
8:48think probably the the self-dealing was
8:50the thing that did in, I think, WeWork
8:53in a lot of investors' mind when he
8:54tried to say, "I own the copyright and
8:56I'm going to sell the copyright cuz
8:58surprise, you never actually bought the
8:59copyright from me and I want 6 million
9:01for that and I'm going to buy buildings
9:03and lease them back." All that
9:04shenanigans was definitely
9:07overplaying his hand. So, to summarize
9:08your point, maybe it's good to have some
9:11level of control,
9:14you know, maybe dictat- dictatorship
9:16control, but with some sunlight is maybe
9:19the ultimate model. Yeah.
9:21Yeah, that's how it was with like
9:22Facebook. I mean, look, Mark Mark
9:23controls Facebook, but he has a really
9:25good bright brilliant team around him
9:26that balances him. And there was never
9:28that over there. And that's what I've
9:29done here at Equinox. We built this team
9:31that's really good balance around me of
9:33people that are objective, they'll tell
9:35me no, they'll tell me yes, they'll tell
9:37me whatever I need to hear that
9:38whatever's honest they'll tell me and
9:40they're a great balance to me and we've
9:42created this company now that is you
9:44know it's it's over $10 billion today it
9:46by the year's end in my opinion I can't
9:48tell anyone where it's going to go but I
9:49believe it'll be three to four to five
9:51times that we you know and that's a
9:53great thing about being public is as
9:54soon as you start executing your vision
9:56it just starts it just starts going
9:58crazy and that's where we're at so we
10:00let the retail investors come in you hit
10:02on this point earlier.
10:04Most people wait till it's too late for
10:06retail investors to ever get involved.
10:08We allowed retail investors to come in
10:12and they get to ride the ride with us.
10:13Now it's very volatile
10:15but they get to ride the ride with us
10:16and that's the advantage is not just big
10:17big humongous funds that are buying all
10:19your stock and they get all the upside.
10:21The regular person gets to be part of
10:23the Nikola story now and that's a that's
10:24a brand new model that no one's ever
10:26really done before until now.
10:27Yeah, I mean the retail investors
10:29getting involved early they're all
10:30looking for something that has perhaps
10:33the ability to grow like a private
10:35company investment in the venture
10:36capital world where I live everybody
10:38would love to get in on those private
10:39companies but those founders say hey
10:41being public is too difficult. I would
10:43like to stay private I'll just take a
10:44big check from a venture capitalist and
10:46I'll just grind on it. You're saying hey
10:47I want to be
10:48I want to put myself up to the scrutiny
10:51of being public. What has been the
10:53hardest part about being public and
10:54having a bunch of retail investors you
10:57know essentially either being long-term
10:59investors or day traders essentially
11:01gamblers on your stock. What's been the
11:03most difficult part for you?
11:05I'm trying you know the the hard part is
11:07my generation and the generation that
11:08came came after me is very
11:10very focused on immediate gratification.
11:14They don't know what 30 days means they
11:17don't even know what 60 days means they
11:18they know what three days means and they
11:20live their life based upon a very short
11:23window span of instant gratification. So
11:25what I'm struggling to figure out how to
11:27do and I'm working on it every day is
11:29help these investors essentially realize
11:32that do not invest in Nikola unless
11:34you're willing to hold it for say 6
11:36months. Don't even do it because you you
11:38got to allow a company time to execute
11:40their vision or they're going to make
11:41bad decisions. And it's not about the
11:43immediate you got to like Warren Buffett
11:45talks about look, don't even you don't
11:46invest in company unless you put it in
11:48and don't look at it for years.
11:50And the problem is is that you want to
11:52blend you want that you want the
11:54Robinhoods, but you also have to educate
11:56them to become more like Warren Buffett.
11:58Right. Or others. Now, he's not the you
11:59know, he's had some bad runs lately, but
12:01still no matter what he's brilliant. So,
12:04you want to if that's the hardest part I
12:05have is
12:06helping um
12:08my generation realize that instant
12:10gratification is not healthy.
12:12Yeah, it's it's great that people are
12:14dabbling in the market and getting
12:16educated. Uh but eventually what they'll
12:18learn is if some if some company's a
12:20winner, you want to hold it, right? Like
12:22the Bitcoin people, the one thing they
12:23got right is to never sell, right? If
12:25you think that this is the future, then
12:28why on earth would you get off the
12:29train? I think shareholders, Google
12:31shareholders, Amazon shareholders
12:33certainly
12:34have learned that lesson. When we get
12:35back from this quick break, I want to
12:37break down this innovation in business
12:39model because what we've been told is
12:41hydrogen doesn't work, it's too
12:42expensive, and here you are doing this
12:45radical new business plan to sell
12:48transportation by the mile as opposed to
12:50sell the car and then sell the fuel.
12:53You're just selling a flat rate. I want
12:55to understand how you came to that as
12:56the best model, and then what is the
12:58actual economics and why you're pursuing
13:00hydrogen and not electric as your
13:02primary vehicle for your primary
13:05vehicles when we get back on this week
13:06in startups.
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14:59All right, everybody, welcome back to
15:00This Week in Startups. Really excited to
15:02have a very fascinating cat, Trevor
15:04Milton, on the podcast. He is the
15:06founder executive chairman of Nikola
15:08Motors, which you've been reading about
15:09incessantly because stonks only go up.
15:13Obviously, we're in the middle a bit of
15:15a tech stock mania in the summer of
15:182020.
15:19Caused some people believe by my beloved
15:21Robinhood, which I've been lucky to be
15:23an angel investor in Um one of the top
15:25three positions
15:27I've been able to get in on along with
15:28Uber and calm.com and a bunch of retail
15:32investors who can't bet on
15:34sports it seems
15:37are getting into speculating on stocks.
15:40The downside of course you can lose
15:41money but you're going to lose that
15:43money if you're betting in Vegas or on
15:45football teams obviously so maybe
15:48getting a financial education is
15:50something miraculous for this generation
15:52and that could be a silver lining coming
15:54out of the pandemic is that we have a
15:56financial literacy
15:58in this next generation. Trevor of
16:00course has been dealing that with that
16:02because the stock price has been on a
16:04bit of a roller coaster as people
16:05discover the company and then turn over
16:08cards and we hope to turn over some
16:09cards here and understand Trevor's
16:10actual mission understand the insights
16:13and understand the executive which is
16:15critical so let's dig in on
16:19some basic things. Why are you pursuing
16:22hydrogen
16:23and not batteries because it seems like
16:26batteries are in every laptop every
16:29phone and the advances in batteries have
16:31been pretty spectacular I own the the
16:3416th Roadster I have owned a Ford made
16:36I've been a fan of Tesla since the
16:37beginning I've owned every one of their
16:38cars
16:40and the battery life on those has been
16:43spectacular and the prices have gotten
16:44cheaper and cheaper. Why would you jump
16:46off the battery train and go on
16:48hydrogen? I don't understand.
16:49Yeah so actually what people don't know
16:51is Nikola is the only group in the world
16:52that offers both battery and hydrogen so
16:54we have we do build these big semi
16:56trucks and they're either hydrogen or
16:58battery electric and they're two
17:00different markets. So a lot of people
17:02think that battery competes with
17:03hydrogen it doesn't they're completely
17:05different markets. I'll explain this.
17:07Battery works really good up to about
17:09300 miles because you have you don't
17:11need as much weight on batteries to to
17:13you know for the range. So you can get
17:15that vehicle to do what you need it to
17:16do and it'll go up to about 300 miles.
17:19Over 300 miles, hydrogen makes much more
17:21sense because of weight. The weight is
17:23everything in trucking. So, every pound
17:25of batteries you have on your vehicle,
17:27you're losing about 50 cents per load
17:29per pound. Up to So, in if you have a
17:32truck that weighs 10,000 pounds more
17:33like a battery does compared to
17:34hydrogen, then you're going to lose up
17:36to $5,000 on every load you do every day
17:39if you're at full gross weight.
17:41Wait, why is that? I don't understand
17:42that. Is that because the weight of the
17:44batteries degrades the energy usage or
17:46because I'm getting charged to
17:49uh by weight or there's a cap on how
17:51much weight a truck can have? Explain
17:52that to me. I don't understand truck
17:53weights.
17:53Exactly. So, trucks have a cap on
17:55weight, 80,000 pounds. So, if your truck
17:57weighs
17:58let's say 20,000 pounds, that means you
18:00have you have 60,000 pounds in in in
18:04essentially freight you freight you can
18:05move with the trailer, right?
18:07So, but if your truck weighs 30,000
18:09pounds,
18:10then you only got, you know, you got
18:1150,000. So, you lost 10,000 pounds of
18:13cargo you can move. Well, that 10,000
18:14pounds of cargo, a lot of times gets
18:16charged if you're talking about like
18:17pork or whatever else or heavier or
18:19drinks,
18:20you can get charged 50 cents a pound.
18:22So, it's a huge problem.
18:24you're losing 50 cents a pound
18:25essentially.
18:26Yeah, you're losing you're losing money
18:28and revenue on every load. So, it
18:30hydrogen does not make sense in every
18:31situation. It's only a very narrow
18:34window, and that narrow window happens
18:35to be a trillion-dollar industry. That's
18:38that is weight-sensitive loads,
18:40long-range
18:41what we call over-the-road freight.
18:44So, that's moving stuff from state to
18:45state.
18:46Weight-sensitive would be the trucks are
18:47being filled to the brim as opposed to
18:50like maybe a FedEx truck may not be
18:52filled to the brim. It's filled with it
18:53whatever's got to be there tomorrow. So,
18:55it might only be built filled 50% or if
18:57you're transporting cars, maybe they
18:59only take up 50% of the volume. But,
19:01something that could fill a complete
19:02volume would be beer or
19:05food or milk or something, correct?
19:07Exactly. Or there's two things that they
19:08call in in trucking, weight out and
19:10freight out.
19:11Okay.
19:11So, freight out means you could have
19:12like toilet paper in there and you have
19:14no more room and it doesn't matter cuz
19:15you're you're you're 30 lb lighter than
19:17than capacity anyways or 30,000 lb and
19:19no one cares. Battery makes a lot of
19:21sense for that.
19:22Got it.
19:22But when you start putting heavy loads
19:23like drinks like Anheuser-Busch or beer
19:25or food or or milk or anything else,
19:28weight becomes a major problem and
19:30that's where hydrogen makes a lot of
19:31sense. Now, here's the key to hydrogen.
19:34Hydrogen
19:36up until like 2 years ago until Nikola
19:38came along till we really changed the
19:39whole thing, hydrogen would have never
19:41worked. It was too expensive. We started
19:43at $16 a kilogram, which is like five
19:45times more than you would with with our
19:48three whatever three to five times.
19:49a kilogram drive a truck?
19:518 miles.
19:53And what would that drive like a normal
19:54car? Like five times that or 10 times
19:56that?
19:56normal car a kilogram will give you like
19:5740 miles.
19:58Got it. So, a kilogram $16 8 miles is $2
20:02a mile.
20:03Yeah, crazy. You're going bankrupt.
20:05Yeah.
20:05So, now now what we did is we've been
20:07able to drive hydrogen down to under $4
20:09a kilogram. We're about $3 a kilogram on
20:11hydrogen now.
20:12So, all of a sudden those economics now
20:14make sense. You're cheaper than diesel,
20:15you know, you're down below that 30 cent
20:17per mile mark on on fuel. So, now it
20:19makes total sense to
20:20to drive hydrogen. And hydrogen is zero
20:22emission.
20:23How did you do that? How did you get
20:24from 14 to three? Is there some special
20:27sauce there? Uh
20:29Yeah, very simple. It's all about it's
20:30about standardization. So, it's like a
20:32phone, right? When Apple makes a phone,
20:33they'll make 25 million or 100 million
20:35of the same thing.
20:35Yeah.
20:36So, up in America right now, there's no
20:39two hydrogen stations that were actually
20:40developed on the same platform. They're
20:42all They're all engineered from the
20:43ground up separately. So, it's like
20:45your cost is outrageous and they have to
20:47but there's no standardization. So, we
20:49we developed the first ever standard
20:51hydrogen station that can be produced in
20:52the thousands.
20:53Got it.
20:54And that's the key is you just drive the
20:55cost down.
20:55So, that takes if you make a thousand of
20:57these instead of it costing 50 million I
20:59heard to make a a hydrogen station, is
21:00that about right right now?
21:02A big one, yeah. So, a big a huge
21:03station for semi trucks it would be 50.
21:05Now, we've got it down below 15.
21:07So, this is the equivalent in the Tesla
21:09operating system or the Tesla world of
21:11the supercharger network, correct?
21:13Yeah, very similar to that. Um but we
21:15don't ever build on speculation. So,
21:16Tesla goes out and puts these chargers
21:19all over the place for everybody. We
21:20don't. So, Nikola, what we do is we sell
21:22the customers that go to point A to
21:23point B every single day and they they
21:26go back and forth and they never change
21:27up.
21:27So, that's what the the Anheuser-Busch
21:30deal is?
21:31Exactly. So, you put a station on that
21:32one route
21:34and you never have to worry about if
21:35there's trucks to fill there. They're
21:36going to fill 24/7 on that route every
21:38single day and that's where all the
21:39money is.
21:41And so, that $800 million deal, how is
21:43that staged? They they they pay have
21:45they paid you any of that? It's a letter
21:46of intent. I'm just curious the the
21:48nature of that. Why are they It's in
21:49contract or
21:50Yeah, it's in contract but we have to
21:51So, what we have to do is they pay per
21:53mile. So, we allow them to run our
21:55trucks, we cover all the hydrogen costs,
21:57we cover everything and they pay about a
21:59dollar a mile.
22:01And that's how we make our money. And
22:02so, here's here's the way it works.
22:05When Peterbilt sells a truck, they're
22:07going to make $15,000 in profit on that
22:09truck. When Nikola sells a truck, we can
22:11make almost a quarter million in profit
22:12per truck. That means they have to sell
22:1520 times, somewhere around there. We
22:17make 20 times more money per truck we
22:19sell than Peterbilt does or than our
22:21competition. And that's because we own
22:22the hydrogen, we own the oil. But it's
22:24not real oil, it's zero emission fuel.
22:26And that's the key to hydrogen is is you
22:28own the network.
22:30And hydrogen, the tanks empty and you
22:34don't have the weight. So, that's the
22:36reason why you have this big advantage
22:37on the volume the the sort of max load
22:41routes.
22:42Well, even like even our even our
22:43hydrogen, if you have 60 kg, that's only
22:45like 120 lb, you know, it's like very
22:46light. It's a It's 60 kg is more energy
22:50than a
22:51than essentially having 15,000 lb in
22:53batteries with Tesla. So, that's how I
22:55mean, you're talking 120 lb compared to
22:5615,000 lb or 10,000 lb.
22:58Why Why has hydrogen not taken off in
23:00the United States then? I'm I'm curious
23:02your taking It's just too expensive.
23:04Yeah, but we've driven that down now. So
23:05now you see the whole world's talking
23:06about hydrogen now because of equal.
23:08Like 3 years ago you couldn't even talk
23:09about hydrogen. Now it's the talk of
23:12everything around the world. Europe's
23:13you know spending hundreds of billions
23:15on it. Everyone is now.
23:16So so the rest of the world tried to
23:18figure out hydrogen
23:21power cars and trucks. They couldn't
23:24figure it out and then you guys came
23:26along and you figured it out.
23:27Exactly because cars are a terrible idea
23:29a lot of times with hydrogen. They
23:31picked the wrong market. These guys are
23:32I mean it's it's insane. It's stupidity.
23:34They went after the like cars. People
23:36want a $30,000 car. They don't want a
23:37$100,000 cheap car. They want to you
23:40know When I say cheap that means like it
23:42doesn't give you that It's not like
23:42you're buying a a
23:44a G Wagon. You're buying a a tiny little
23:47car and you're spending $100,000. It
23:49will never work. It The reason why
23:51hydrogen works on big trucks is because
23:53you make revenue with it and you can pay
23:54it back and you can it's all about
23:57weight and it's all about range. And you
23:59get range and weight with hydrogen and
24:01you don't get that with batteries. So in
24:02cars battery's awesome, man. This is the
24:04thing we we're honest with people cuz we
24:06sell both battery and hydrogen. So we're
24:09very honest with people about what the
24:10advantages are. And when you get into
24:12cars and light duty, battery's the best
24:14thing. You get into heavy duty,
24:16hydrogen's the best thing.
24:18So they picked the wrong market to go
24:19after. It's stupid.
24:20It makes sense. And so also I I you guys
24:23are making When you do the routes,
24:25you're pre-selling the routes so you
24:27don't have to
24:28incur the cost of building this route.
24:30Let's say it was from Arizona to Texas
24:33or something.
24:34Um just making something up here. Uh but
24:36you're based in Arizona so
24:38betting that would say the the if you do
24:40get this Anheuser-Busch thing up and
24:41running it would be in that Southwest
24:43category. Am I correct?
24:45I could Yeah, we have
24:47there's two or three routes that have in
24:48this in this western area. We're
24:49definitely going to focus on those for
24:51sure right away.
24:51And so those repeated routes
24:54de-risk you because you don't have to
24:55take on the CapEx structure without a
24:57customer. So, previously, the people
25:00making the hydrogen hydrogen cells,
25:03trucks,
25:04and to making the stations were all
25:06different people. Nobody had the ability
25:08to build it, and then people would come,
25:10and then people would uh actually
25:12Exactly. Well, this is This is a
25:14difference of us and everyone else. So,
25:15think about a company called Clean
25:16Energy. They used to build natural gas
25:18stations. They They spent hundreds of
25:19millions all over the country, actually
25:21billions, I think, and no one ever came
25:23to fill out them.
25:24And so, they just like built these
25:25things hoping people would come.
25:26Nikola's totally different. We only
25:28build the order. That means we pre-sell
25:30a route, we put a station on it, and we
25:32make hundreds of, you know, we make
25:34either tens of millions or hundreds of
25:35millions of dollars on that route over
25:37time. So, we just keep building them.
25:38Every Every single route we do, we can
25:40make a quarter million dollars a truck.
25:42And that's the margins are huge compared
25:44to our competition. And that's why
25:46there's so much excitement about Nikola
25:47cuz we've done a couple things. One, we
25:49made the second dirtiest industry in the
25:50world go zero emission.
25:53We've We create 10 to 20 times more
25:55revenue per truck than our competition.
25:58Our margins are gigantic, and we have 10
26:00billion dollar 10 over 10 billion
26:02dollars in pre-order reservations like
26:04like customers signed, ready for us to
26:07deliver them trucks.
26:08Letters of intent, right? These are
26:10people who want to have And why do those
26:12truck Why do those shippers want to
26:15switch off diesel? Is it because of They
26:17have goals in terms of greenhouse gases,
26:20or is it they see this as the future,
26:22and they want to invest in it, or is it
26:24cost?
26:25No, I real quick I want to correct
26:26something. Not letter of intent, they're
26:27actually contracts.
26:28Contracts, got it.
26:29Yeah, billions and billions of dollars
26:30with the contracts. So,
26:33um I want to be clear about that cuz a
26:34lot of people thought that it's just
26:35like a non-committal thing. It's not.
26:37These are like signed on the dotted line
26:40billions and billions and billions and
26:41billions of dollars in orders. Now, we
26:43have to deliver, and they can get out if
26:44we don't deliver, but that's how it is
26:45with any contract you do in life. Like,
26:47you know, if they even order a
26:48Peterbilt, they can still back out if
26:49Peterbilt doesn't give them a truck.
26:51And And those folks who are buying those
26:53would not go through the time to sign
26:55them
26:56if they did not have the intent.
26:59Exactly. I mean, these are big
27:00companies. They they want to be they're
27:02they're actually planning right now like
27:03we have calls with Anheuser-Busch on a
27:05monthly basis where we're talking about,
27:07"Okay, when's the delivery? What days
27:08are these trucks coming in? When's the
27:09hydrogen station going in? When's the
27:10permit going in?" Because they actually
27:12have to phase out their diesels. This is
27:13like real serious stuff. It's not a
27:15joke. And if you miss it, it's it's tens
27:18or hundreds of millions of dollars.
27:19they have to Oh, they have to phase it
27:21out for environmental reasons that vary
27:23by state in the United States, correct?
27:25Yeah, those those deal Well, this
27:26because of lease cycle. So, they have a
27:27they have like a 3-year lease cycle on a
27:29truck or whatever and they have to phase
27:30out those diesels when ours come in. So,
27:32if they miss that, that window has to be
27:34within like 1 or 2 months of each other.
27:36And if you're off, you're going to get
27:37sued. It's a it's a very complex thing.
27:40It's not simple just to go switch out
27:43you know, switch out from one truck to a
27:45whole brand new one. It's a complicated
27:47mess.
27:47All right, when we come back, I want to
27:49understand how you're going to compete
27:51with Tesla if they're building a
27:52self-driving truck that's
27:53battery-powered. And if that is coming
27:56up in the conversations when you talk to
27:59your customers, if they're saying, "What
28:01about what Tesla's building?" when we
28:03get back on this week in startups.
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30:03Okay, Trevor Milton's on the podcast
30:05being super honest and up front about
30:07his company Nikola Motors,
30:10which is building
30:12semi competitor to diesel trucks and of
30:15course the semi that Tesla is building
30:18to make clean air, which is great for
30:19the world and to get rid of emissions.
30:22They are betting both hydrogen and
30:25batteries. But you your company's
30:28relatively small given the I think 10
30:31billion plus valuation and I know the
30:33valuation was maybe three times that at
30:35the peak. So, you're worth 30 billion
30:37just before even having the products on
30:39the road, which is I think where the
30:41criticism comes from, but when hearing
30:43the vision starts to sound a little more
30:45reasonable. Um
30:47perhaps not a 30 billion, but you know,
30:49at 10 billion maybe it sounds more
30:50reasonable as a bet. Um
30:53when will you know if you've made the
30:55right decision to go hydrogen versus
30:58battery on the long haul and is there a
31:00chance that you might switch it?
31:02Uh no, because we actually build both
31:04right now. So, we build we actually have
31:06the first ever battery electric truck
31:07coming to market beating Tesla. So, we
31:10have a 720 kWh battery truck coming to
31:13market at the middle to end of next year
31:15in full production with a validated
31:17chassis.
31:18Um they may beat us with like one or two
31:20trucks, but we have full production
31:21coming out that point where you can spit
31:22out thousands of these things.
31:24And the reason you're able to beat them
31:25is because you don't you've taken the
31:27OEM partnership route. You're not
31:29actually building the trucks yourself.
31:30You're doing it with a partner who's
31:31built trucks already.
31:33Exactly. I've actually been asked in the
31:34past, you know, that I've said I've had
31:36people ask me, you know, wait, if you
31:37could have given Elon, you know, two
31:38bits of advice cuz I think the dude is
31:40pretty smart in a lot of areas.
31:41You think?
31:43He's really smart in a lot of areas.
31:44that to Elon and you give you can see
31:45that he's smart?
31:47Yeah, I mean, he's you know, he's
31:49Yeah, he's in some areas he's ballsy,
31:50you know, he's got a lot of guts and and
31:52he's willing to put his money where his
31:53mouth is and so
31:55I I get him. I get it. Here's the thing.
31:57There's there's two things I think that
31:58he should have done. He should have
31:59worked with dealerships first of all to
32:01to service his vehicles. May- maybe not
32:02sell them, but service them.
32:03Mhm.
32:04And then the second one is is that um
32:06you know, if you think about uh
32:08if you think about um
32:12OEMs?
32:14Yeah, I was going to get back to the
32:15service though. But if you would think
32:16about the the manufac- I was going to
32:17cover something in the service, but
32:19don't worry about it. The the OEMs
32:20building these vehicles is a nightmare.
32:22He had a great relationship with Daimler
32:23and Daimler could have come in and
32:24helped him solve all of his
32:25manufacturing problems with with
32:27vehicles and it would have been a walk
32:29in the park and he would have been
32:29building twice as many cars as he is
32:31today.
32:32And now it would have required him to
32:34give up some of the company, but who
32:35cares? So, what we did is we said, you
32:37know what, we don't want to do our you
32:38know, we think it's not smart to do our
32:39own service and we don't think it's
32:40smart to actually un- own the like or to
32:43build the trucks ourselves. We want a
32:44partner to help us. So, we went and we
32:46partnered with Iveco. They're the fifth
32:47largest truck OEM in the world. They
32:49have 50 years, five decades of of
32:51heavy-duty trucking experience in cold
32:53weather, Arctic weather, heavy-duty
32:55roads,
32:56and all over Europe. They are they
32:59they're just huge. And so, they came in
33:01and they said, "Look, Trevor, we have
33:03one of the best trucks in the world, but
33:04we're we have no technology."
33:06And we said, "Well, that's good cuz we
33:08have the best powertrain technology in
33:09the world, we think, but we have no we
33:11have no expertise in the truck chassis
33:13world."
33:14And um so, we partnered up with Iveco
33:16and they they helped us with uh they
33:18spent four years and billions of dollars
33:20building a brand new truck platform. And
33:23in Europe, all the trucks are the same.
33:25So, a battery-electric truck's identical
33:26to a diesel truck in Europe. It's they
33:28they have to be cuz of of cuz of length
33:30restrictions and everything.
33:31So, we partnered up with them and now we
33:34have the first ever zero-emission truck
33:35coming to market. It's got 720 kWh of
33:38battery, and it's it goes over 300 mi.
33:41And so, we know battery as good or
33:43better than anyone in the world, and
33:45we're even beating Tesla to the market
33:46with our semi-truck. That's why he just
33:48recently
33:49uh why Elon went out and and told his
33:50team to full focus on the semi-truck
33:52because we're beating them to the
33:53market. So, on the freeway or in within
33:56the cities, battery kicks
33:58hydrogen's butt within the city a lot of
34:00times, almost every time. But as soon as
34:02you get on the freeway, that's where
34:03hydrogen that's where hydrogen makes
34:05sense. So, we do both of them.
34:07Uh and
34:08you're going to it did when people are
34:11signing these deals with you, are they
34:13saying, "Hey, how do how do you compete
34:14with Tesla? Is Tesla going to just sell
34:16the trucks to them, do you think, or do
34:17you think Tesla will do this, you know,
34:19will just charge you by mile approach?"
34:21Cuz that seems like a pretty clever
34:22business approach. I'll give you credit
34:23to change they're going to they're going
34:25to change to exactly what we did. So, um
34:27look, I've given a lot of credit to
34:29them, but they're going to give it a lot
34:30of credit to us, too. We're the ones
34:31that pioneered the entire cost per mile
34:33with a semi truck. And they're going to
34:35pivot. And then we've already heard it
34:36now, so Tesla's starting to tell people
34:38they're going to start selling energy at
34:39a fixed rate for them for their battery
34:41electric trucks. So, how do we compete?
34:43Well, we don't compete hydrogen versus
34:45battery, we compete battery versus
34:46battery.
34:47So, our battery electric truck will
34:49compete with the Tesla truck. And
34:51they're going to And And the best part
34:52is this market's so big that both Tesla
34:55and Nikola could build trucks for the
34:57next 20 years and never even really
34:59compete with the same customers. That's
35:00how big this market is.
35:01But you've got a a relatively small
35:03company about 400 uh employees. Um so,
35:06you're not doing the manufacturing.
35:07You've outsourced that. Um so, what do
35:10the 400 people at Nikola do? What is the
35:13specialty that you're focusing on?
35:15Yeah, I love this podcast by the way cuz
35:17you get into like really good questions
35:18that a lot of people don't get to. Yeah.
35:20The The 400 The 400 people here is are
35:23focused on spent like we call them
35:24specialty engineers. They're They're all
35:26about the advanced um technologies of
35:28the company, whether it's software or
35:30hardware, inverters, e-axles, um
35:33batteries, battery management systems,
35:35controls, all that stuff, right? So,
35:36what we do is we take that once we fit
35:39once we build a prototype, then we send
35:40it out to someone like um an in e-axle
35:43you could do someone like uh you know,
35:44BorgWarner, ZF, or whatever. ZF, they
35:47call it ZF. And they're the experts.
35:49They have, you know, 30, 40,000
35:51employees on board. Why would you want
35:53to do what they do? So, Tesla does
35:54everything themselves. I don't. I'm not
35:57saying they're right and I'm wrong or
35:58I'm not saying I'm right and they're
35:59wrong.
36:00The going full stack for Tesla gives
36:02them the ability to build these
36:03dreadnought factories around the world.
36:06And if they can continue to sell cars at
36:07this pace, it could become like
36:10uh like a literal factory where they're
36:12dependent on no one. I think with the
36:14OEM, you have so many people who can
36:17screw up
36:19and then delay the production of what
36:20you're doing. You lose control, which is
36:22what Tesla had actually in the Roadster
36:24days. I think that almost killed the
36:25company before Elon was running it. The
36:27the Tesla Roadster was built with OEMs
36:29and
36:31there is some challenge to that too,
36:32right? You are dependent on each piece
36:34of the puzzle coming together with those
36:37OEMs and if any one of them screws up,
36:38you've got to then
36:40you have a delay, right? You're you you
36:41lose control.
36:43That is true, but there's been hundreds
36:44of millions of cars built on that
36:46platform and they've all all these OEMs
36:48have figured out how to manage their
36:49supply chains. It's not that hard to do.
36:51Yeah.
36:51You have to now a lot of it comes down
36:53to financing, how much you know,
36:54just-in-time versus you know, stored
36:56inventory. Most of these guys are too
36:58greedy to ever have stored inventory. So
37:00they're if they have a 3-day delay, it
37:02affects their entire supply chain. I'm
37:03not like that. I'd rather have a big
37:04inventory of our parts and just and for
37:07stability, but it hundreds of millions
37:09of cars have been built by third-party
37:11suppliers with with these different
37:13parts. Remember, the tech is ours. So
37:15the battery like all the important stuff
37:17like software, batteries or or e-axle
37:19designs, it just means we use someone
37:21else to to build them in the thousands
37:23for us, but we own all the tech.
37:24Yeah.
37:25And that's that to us is allows us to
37:27not have to have 50,000 employees.
37:29Right. And then let's talk about
37:30self-driving. That's
37:32obviously coming and it's going to be
37:34coming in the the mid-term, I think.
37:36Trucks and truck routes are the most
37:39repetitive and the easiest to get right
37:41and
37:42that's clearly why so many people are
37:44focused on it. You're taking this OEM
37:46approach to
37:47you're going to have to have
37:48self-driving in the trucks at some
37:50point. So is it going to be a similar
37:52thing where you pick Cruise or you pick
37:54Waymo and you just say, "Hey, can we
37:57license your technology?" which is what
37:58Waymo wants to do anyway.
38:00Absolutely. I mean, look, here's the
38:01thing. Like Nikola took a different
38:02model than Tesla. Tesla does everything
38:04in house and then and they're good for
38:05it, but they're also bad for it. Um
38:07you've got thousands of people like for
38:09instance, Daimler and Bosch have got
38:11thousands of people on autonomy right
38:12now. You have Cruise that have you know,
38:14they have hundreds of people. You have
38:16TuSimple, you have Waymo, you've got
38:17they've got thousands of people spread
38:20throughout this.
38:21You know, to hire these people is almost
38:22impossible, let alone teams of thousands
38:25of them, and the cost is outrageous, and
38:27and it's becoming a commodity. So, I I
38:29kind of what I tell everyone is don't
38:31insource anything that's a commodity.
38:33So, if it's a commodity, don't do it.
38:34Just just bring it in from a supplier.
38:37Uh
38:37It's like glass on a window. Why why do
38:39your own glass? That's insane. Just buy
38:41someone's glass.
38:41I guess the the the re- the argument
38:44Tesla had was because they built the
38:46entire thing, they're dependent on
38:48nobody, they put raw materials into one
38:49side, and they capture all that profit.
38:51Yeah.
38:52And then they can scale faster. That
38:53would be the argument. But in your case
38:55with trucks, it's not like you're trying
38:57to produce five or 10 million of these a
38:59year.
38:59There you go. There you go.
39:00You expect to produce five or 10,000 a
39:02year or something.
39:03it. It's all about quantity, and that's
39:04the problem with trucking. You don't
39:05have the quantity you have in
39:06automotive. And that's why I tell people
39:07what we do is not doesn't mean that
39:09Tesla's wrong. It just means it's a
39:10different industry.
39:11So, it's it's just a totally different
39:14world.
39:15And And now, did you
39:16pick the name Nikola 5 years ago because
39:20Tesla existed, and you thought that
39:21would be like interesting? How'd you
39:23come to the brand name? Because I could
39:25think
39:25people are like, well, that's kind of
39:26close to Tesla.
39:28Yeah.
39:28How How did you come to the name the
39:30name Nikola the company when there was
39:31another company with the last name of
39:33the inventor?
39:33Yeah, I didn't name it after because of
39:35that. That would be a very prick move to
39:36do. That's a bad call.
39:38You said it, not me. I'm going to ask
39:40you for that reason cuz it felt a little
39:42bit trolly to
39:43Yeah, it would be a prick move if it was
39:45It had nothing to do with that. It had
39:46everything to do with the fact that
39:47Nikola Tesla was the greatest inventor
39:49in the world. I'm a true inventor. I'm a
39:51creator. I started five companies in my
39:53life. I've been doing this for 20, you
39:55know, over 20 years. I I know what it's
39:57like to create. I know what it's like to
39:58innovate. And the greatest creator of
40:01electricity and technologies around that
40:03have been Nikola Tesla. So, this was
40:05paying homage to him. Had nothing to do
40:07with Elon. And the biggest problem that
40:08I have is
40:09you know,
40:11the the guys over there that got upset
40:12at us for doing that, it's all a pride
40:14thing. Has nothing to do with it. Like
40:16No, one gets
40:17I mean, I guess the argument would be
40:19you're kind of drafting on their
40:20branding.
40:21Well, what do we get out of it? There's
40:23nothing we get out of it.
40:23I mean, it creates a category. Every
40:25journalist has to say, "Oh, Nikola and
40:27Tesla. Nikola Tesla. Get it." Like it
40:29basically me it puts you in the
40:31category, you know, or stands you next
40:33to them, right? It's kind of like a
40:33photo bomb. I guess that's the best way
40:36to describe it.
40:37I guess there's probably some good that
40:38can come from it, but there's also been
40:39a lot of bad. And so, I've I've all I've
40:42always told people, "Look, when I have a
40:43belief in something, which is I think
40:45that Nikola Tesla was one of the
40:46greatest inventors in the world, I'm
40:48going to name my company after him. I
40:49own the trademarks on it."
40:51So, I'm going to do it regardless of
40:53what someone else thinks because I'm a
40:54guy of principle. Now, if if someone
40:56else doesn't like it, I I don't it
40:58doesn't really matter to me. But it just
40:59to answer your question, I had nothing
41:00to do with with Tesla itself. I did I
41:02mean, look, I've been a I've had Tesla
41:04cars for the last I think over 5 years
41:06now, and I finally just got rid of it. I
41:08finally went to a Jaguar I-Pace to try
41:09it out. And it's the first time in 5
41:11years I've
41:12the Tesla than the Jaguar?
41:14Um software-wise, Tesla destroys Jaguar.
41:17Quality-wise, Jaguar destroys Tesla. But
41:20it's But that's that's the problem is I
41:22like software more than the
41:24quality of the material. So, it's kind
41:27of a problem because I prefer the Tesla
41:29car with because of the software and how
41:30easy it is to use. But I and I despise
41:33Jaguar with their software. It's it's a
41:34monstrosity of problems. And and nothing
41:38works. But so, I I love what Tesla's
41:41been doing around the world because they
41:42they've literally pushed OEMs to learn
41:44how to be to think
41:46just to be normal. Like I'll give you a
41:47quick example. If you want to start your
41:49car with a Jaguar, it takes like I swear
41:51it takes like 15 minutes to do it. You
41:53have to log in. You have to like
41:54re-validate. You have to tell the car to
41:56do something. It has to wait. It has to
41:57think about it. It has to re-find where
41:59the car is. It's like 15 minutes to turn
42:01your AC on.
42:02Something you can't even do it with the
42:03windows open.
42:04Right.
42:05Why does it Why Why do you care if the
42:06windows open? Let me start my damn car.
42:07Yeah.
42:08You know, this and it's like this total
42:10mess, right? And you get on Tesla and
42:11it's like one click of a button you're
42:12in the app, another click of the button
42:14you set the temperature, another click
42:15of the button close the app. It's like
42:17three easy three steps.
42:19you have your phone, you can if your
42:20phone is paired, you can just open the
42:22door and sit down and the car turns on
42:24cuz it knows you sat down. Like they've
42:26actually thought this through. Uh
42:27I I have given so many compliments to to
42:30what they've done in the world at that
42:32um
42:33it's like
42:34it's definitely incredible what they've
42:35done.
42:35are going to do some consumer cars as
42:37well, correct?
42:39We only one. We have the Nikola Badger
42:40which is well, I shouldn't say only one.
42:42We have the Nikola Badger which is a
42:43electric pickup truck.
42:44I want to know um
42:47why you decided to add that to your
42:49plate because you have a huge big plate
42:52filled with delivering on these $10
42:55billion in contracts, why would you then
42:58go to consumer when we get back on This
43:00Week in Startups?
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44:40Okay, let's get back to this amazing
44:42episode. All right, we're chopping it up
44:43with Trevor Milton, the uh
44:46executive chair and founder of Nikola
44:48Motors. Uh they are building hydrogen
44:52and battery-powered semi trucks with
44:54their partners. They're taking OEM
44:55route. They raised about $500 million
44:58before they did their SPAC.
45:01Uh the SPAC brought in another 7 800
45:04million. Is that correct?
45:05Yep, 700, yep. Over 700.
45:07Uh and there were a bunch of warrants
45:08associated with that. And so, when you
45:10buy a warrant, you actually have to buy
45:12it. So, I believe that the company gets
45:14that cash, correct?
45:15Yeah, we just got another 260 million
45:17this week from it.
45:18So, that means you have a billion-dollar
45:20war chest.
45:21We do. We have a almost a billion
45:22dollars in our account right now. And no
45:24debt.
45:24Uh and only 500 employee or 400
45:27employees. So, that means you're you're
45:29really only spending on employees 10
45:32million a month or something, I would
45:34guess. Something in that range.
45:35Yeah, it's really low and that's what
45:36the advantage is is that's why we did it
45:37that way.
45:38So, now you've got all this cash
45:40uh on the balance sheet and you've got
45:43all this runway.
45:45But you this building a network of
45:47hydrogen chargers and coordinating the
45:50building of hydrogen trucks and
45:52satisfying a bunch of customers seems
45:54like an awful lot of work.
45:56And then,
45:58uh I'm not sure exactly the date you
45:59announced it. What date did you announce
46:00that you're going to take on Ford's
46:02F-150 pickup truck and Elon Cybertruck
46:06and the Rivian Rivian is the other
46:09Rivian yes sorry Rivian
46:11so now you decide F it I'm going to
46:14create an F-150 the best-selling car in
46:17the United States I think and obviously
46:18best-selling truck why would you take on
46:21more work?
46:23That's a good question.
46:24Yeah. So here's the reason why our
46:26trucks are a gravy train with money.
46:28Um that's where all the money comes from
46:29is our is our is our big semi trucks
46:31right? The problem is is 90% of
46:33Americans will never own a semi truck
46:35and so your investment your invest your
46:37portfolio of investors is going to be
46:38very limited. And we wanted to go and
46:40build a company that's going to be worth
46:42500 billion trillion dollars over say 10
46:44or 10 or 15 years and if you're limiting
46:46yourself to 10% of the market you'll
46:48never do it no matter how good your
46:49numbers are. The reason why people love
46:51Apple they everyone touches their
46:53product. Why do they love Google?
46:54Everyone touches their product. So
46:56you're what I did is I knew day one you
46:58know once once we started coming out we
47:00had all this gravy train coming in from
47:01the semi truck program. My my question
47:04was okay that's great but I'll never
47:06touch the average consumer so therefore
47:0790% of investors will probably never
47:09invest in me. So I needed to touch the
47:11consumer and so that the truck is for
47:13the profit the semi truck the pickup
47:15truck's for the consumer and the
47:17consumer is the one who is part of the
47:18Robin Hood portfolio is part of the the
47:21you know the family office or whatever
47:22and that's where all the the valuation
47:24of the company comes from
47:25Will you have are are you saying you're
47:27going to do it profitably or that it's a
47:29loss or a break it's profitable it will
47:31you you tend to be profitable with it.
47:32What will that retail for have you
47:34announced the pricing and the launch
47:35date of that?
47:36Yeah 60 to 90k
47:38and so very reasonable in the price and
47:40we'll have about somewhere right around
47:41about 20% margin on that and it hits
47:43next year so we'll be in production at
47:45the end of next year.
47:46And are you taking the same approach
47:47you're going to build it with a partner
47:48as opposed to
47:50Yes.
47:50So who's that partner who who who's
47:52going to build the pickup truck with
47:53That's not been announced yet but it'll
47:54be coming out soon. That's it that's
47:55probably one of the biggest
47:56announcements the entire investment
47:58community wants to know about Nikola and
48:00that hits very soon.
48:02Okay.
48:02That's a huge deal and it'll be built at
48:04their factories through their supply
48:06chain. You're talking about billions of
48:07dollars in saving with the ability to
48:09build a hundreds of thousands of these
48:11without any type of
48:13growing pains and quality
48:15hydrogen or is it going to be battery?
48:17Both. You can order either way. You can
48:18choose battery or hydrogen and both.
48:20hydrogen, how would you fill the tank if
48:22you have yet to build the
48:24network?
48:25Well, in some states like California of
48:26hydrogen, you already have you know, a
48:28lot of hydrogen stations, but we have
48:30700 hydrogen stations going up right now
48:32throughout America
48:33and it's just going to take time. We
48:34won't sell hydrogen in every market.
48:36We're going to say, "Look, as soon as
48:37our station comes online, then you can
48:38buy the hydrogen version there."
48:39Why would somebody buy the hydrogen
48:41because it's
48:42it seems like we said earlier that
48:44battery kicks hydrogen's ass in low load
48:47situations. We take that as a given. Who
48:50who has a pickup truck that's going to
48:52be going for 10 hours hauling something
48:55huge? That seems like a tiny part of the
48:57market. What even what is that market?
48:59No, about 30 to 40% of the pickup truck
49:01market actually uses their truck for
49:02work and pulls trailers. So, in that
49:04situation, you do not want a battery
49:05truck. You know, if you pull a if
49:07trailer with a Tesla Model X right now,
49:08you lose about 60 70% of your range. So,
49:11you're talking about getting a you know,
49:13you can't put a trailer on there and go
49:14more than 100 miles on a on a Cybertruck
49:16without a dying or 150. So, the idea
49:19here is is that if you can with
49:20hydrogen, you can allow that truck to
49:22pull a trailer, you know, it'll give you
49:24a 600-mi range without a trailer and
49:26about a 300-mi range with it. And so,
49:29that's it's made for the construction
49:31world, the people pulling trailers, the
49:32business owners, the guys going to job
49:34sites or those trying to power a job
49:36site or those hauling big loads and
49:39that's what it's for on the the that's
49:40what it was made for for the hydrogen
49:41version.
49:43And so, you will on the hydrogen side,
49:46is there a hydrogen pickup truck out
49:48there today?
49:49No, we're the first one.
49:50Yeah. So, you're not going to be
49:51competing with anybody on the hydrogen
49:53side for the pickup truck, but you will
49:54be competing with Rivian and the
49:56Cybertruck eventually.
49:58Yep.
49:58Um on that side, but you're not going to
50:00be building it yourself. You're going to
50:02be putting your innards, your
50:04drivetrain, your batteries, etc. But I
50:05assume you're not making your battery
50:07packs either, right? That's your
50:08lightweight
50:09You do make your own battery packs?
50:11make our own battery packs. That's a key
50:12That's a key element because of the
50:13cost. The battery pack's 30% of your
50:15vehicle's cost or 40. So, it's one of
50:18the most important things to actually
50:19bring in house. And so, we do make our
50:20own battery packs. The whole truck is
50:22our design is our is our build, but
50:24another manufacturer is going to
50:26actually be spitting it out on their
50:27assembly line.
50:28So, you're going to be in the battery
50:30business. You're going to build battery
50:31packs.
50:32Oh, yeah. You have to be. You'll never
50:34make it as an OEM if you don't build
50:35your own battery. That's the most
50:36critical part.
50:37What What do you think Tesla's going to
50:39announce with this
50:40new battery technology? They had bought
50:42that battery company. Is it going to be
50:43that the life cycles of batteries will
50:45get much better?
50:47You know, he's
50:48go down. What do you think it's going to
50:49be?
50:50Yeah, I think you're going to be cost,
50:51material type, you know, things like
50:53that. But I think you know, he's
50:56You know, it's it's tough, dude. Like I
50:58I get I get where they come from, but
51:00they
51:00there's a
51:02I really hope that they focus on just
51:04getting out what they've promised. Like,
51:06you know, full self-driving has been
51:07promised for many years and still not
51:08there. It's And there's just a lot of
51:11things where they need to focus on
51:12delivering and they they started to
51:13deliver quantity of cars, but they need
51:16to start delivering on their on their on
51:17their their promises of what they've
51:19done. And that's been really my only And
51:21another battery thing is like, okay,
51:23look. You got Samsung, LG, and Panasonic
51:25spending tens of billions of dollars in
51:27research and development. Why would you
51:29want to try to engineer your own cell?
51:31You could just pay Panasonic to do that.
51:33Like, why why try to You don't see
51:36Well, I think they want
51:37I think the reason they would be doing
51:39it is because they think they can do it
51:40better. And that if they do 10 different
51:43things concurrently 10-20% better, they
51:46change the world.
51:48They can.
51:49The complexity is that you can't focus
51:51and and I that's that's okay, but I mean
51:54you know look it's
51:56it's a it's a tough one for me because
51:57as an entrepreneur the easiest thing to
51:59do is be distracted. It's easy to be
52:01distracted. It's hard to focus.
52:03And I maybe that's where we
52:05differentiate ourselves a little bit as
52:07as
52:07we have a lot going on as well, but
52:09having I mean there's no money in
52:11batteries. They pay a buck 75 for a cell
52:12right now, okay? The 2170. That's the
52:14going rate for billions of cells.
52:16They're a buck 75 for this battery,
52:18right? And uh if you build it yourself
52:20you're going to be a you might you might
52:22be 10 or 20% cheaper than that, but then
52:24you got the CapEx that's going to cost
52:2530%. So it's a net loss of 10% to do it
52:28yourself.
52:28Unless you have a thesis that you can
52:31continue at a faster pace to lower the
52:33price and that could make the
52:36difference, right? Uh
52:37It is it is true, but I mean you're not
52:38getting any like that's a whole 10 years
52:40down the road. Like I don't know. I it's
52:42a hard thing man cuz like I there are
52:43certain things I do in house doing
52:45cells. We've So
52:46I would say both of these I would say
52:48both of these are valid ways to do it.
52:50In fact Tesla started with the idea of
52:52using OEMs and specializing on the
52:54software or just in electric where they
52:55just had a small budget back then. But
52:57to take on these projects and then use
52:59them cuz you remember the battery pack
53:01in the Tesla is the same one that goes
53:02on the wall in a home and the same one
53:05that's used in the power grids in
53:06Australia and Hawaii. So you know I
53:09think that they have the vision to be an
53:10energy company overall and just sell you
53:14the Tesla energy pack where you get the
53:16car
53:17the solar panels and the wall unit,
53:20right? The power wall.
53:21Yeah, no they've done some cool stuff
53:22man. I mean I love what they've I love
53:24what they've done. I I just uh there's
53:26so many things that are like you know
53:28you only have so many hours in the day,
53:29right? And there's so many things that
53:30you can actually do that would be like
53:32monumental change rather than like
53:34Like what?
53:35incremental change. I like monumental
53:36change. I don't like incremental so I
53:37don't
53:37the monumental change Tesla's not doing
53:39that you think they should do? What's
53:40the number one thing?
53:41Uh man, well I don't want to give give
53:43some of that away, but I think I think
53:44Elon ought to seriously focus on
53:46aviation.
53:47Is my opinion.
53:49Really? Like VTOLs?
53:51Yeah, I think he ought to focus on on
53:52aviation. That's my opinion cuz that's a
53:54that's one of the biggest polluters in
53:55the world. It's it's it's one that needs
53:57a lot of battery tech and it's one that
53:59has a lot of money involved with it cuz
54:00you're transporting people. I think he
54:02needs to come up with VTOLs that are
54:03moving containers. I would advise you
54:05know, if he was asking me you know,
54:06"Tory, what would you do?" I'd say,
54:07"Listen, we've already ran simulations
54:09on it. I already know what it takes to
54:10VTOL containers and move them out of
54:12ports." That's what I I'd probably
54:14suggest he goes into.
54:15VTOLs of containers out of ports. So,
54:16instead of putting them on
54:18trucks, you just actually lift them out.
54:20That's going to be
54:20Lift them out over the mountains, right
54:22right up to a distribution network that
54:23gets moved by a truck after that. So,
54:25it's like a 15-mi trip. That's it and
54:27you charge when you're done. You go drop
54:28that that container off out of the out
54:31of California. So, it picks it up in the
54:32port of LA, it moves it up to to right
54:35outside of right over on the other side
54:36of the mountain range and then it takes
54:37a truck takes it from there. And it
54:39decongests the whole entire valley, it
54:41gets rid of all the emissions
54:42Or you could do that through a
54:43hyperloop.
54:45It is amazing the amount of innovation
54:48going on cuz you could also just throw
54:49those things into a hyperloop tube and
54:51just zip them out.
54:52Do it. I mean, that's the stuff I love,
54:54man. You solve solve a big problem. I
54:57you know, a 5% or 10% incremental change
54:59on a battery is a big deal, but they're
55:01doing that anyways right now. Everyone.
55:03I'm curious
55:05uh
55:05what where you came from and how you got
55:08to here because you know, we got uh 44
55:09minutes into the podcast. I think we
55:11under the we understand the strategy,
55:13the product, what you're doing. I'm
55:15curious who you are cuz I haven't heard
55:17of you before this. I've been in the
55:18business for a while, but I don't know
55:19everybody, but I know a lot of people.
55:21You had five companies before this.
55:22Which one was the most successful
55:24objectively in terms of outcome?
55:27Well, outcome it would have been my
55:28previous one which was D Hybrid Systems
55:30where we built hydrogen and natural gas
55:32storage. So, I came from the heavy-duty
55:34industry already understanding
55:36heavy-duty trucks, storage, how to store
55:38energy. um Um that's That one I sold the
55:42Worthington Industries.
55:43And uh but then, you know, I'd say that
55:45the most successful one I had ever had
55:47was actually my first one.
55:48get? How did that How big did that get?
55:49The the storage one? That Worthington
55:51a few million revenue our first year,
55:52second year was 13 million, we're on
55:54track for 50 million in the year after,
55:55and that's when we sold to Worthington
55:57Industries.
55:57And Worthington's also your partner in
55:59Rivian, right? I'm sorry, on um Nikola.
56:02In Nikola, yes, they had a stake in the
56:04company. I They actually had a zero
56:06basis and they've made a over a billion
56:08dollars from my investment in it.
56:10Uh and so and then before that you said
56:13you had another company that did even
56:15better?
56:15Yeah. So
56:17Well, no, actually my biggest failure
56:18was my biggest success in my opinion.
56:19That's where I differentiate. It was a
56:21company called upillar.com.
56:23It was like we did online e-commerce. Um
56:26it was very similar to Amazon. We built
56:28the first shopping cart out there that I
56:29know There might I don't know of anyone
56:31before it, but what that shopping cart
56:33did is allow you to buy like 20 items
56:34from 20 different people, put it all
56:36into a one cart. We would handle the
56:38merchant process one time, and then we
56:40would split it up under different
56:41invoices. We actually we actually had
56:44that before anyone else, before Amazon
56:46did. And then obviously Amazon grew and
56:48would became incredible and they kicked
56:49our butt. But we just couldn't handle
56:51the growth. We That was like my biggest
56:54learning experiences were at upillar
56:55where I made a ton of mistakes in my
56:57life and it made me who I am today.
56:58What What did you um
57:00If you If you were to look back on that
57:01time, top two or three mistakes that you
57:03fix now in your in your mind?
57:05Um I tried to scale too quickly. That
57:08was a big problem of mine. Like we had
57:09we were we were we were spread out thin.
57:11So, we were we were focused in certain
57:13markets for for e-commerce and we were
57:15killing it. And then we tried to hit the
57:17whole country and it and it just
57:18imploded. So, the problem I should If I
57:21would have just stayed focused on the
57:22markets that we were at, we would have
57:24done well and we would have had enough
57:25people on the site to inside those
57:27markets to make it valuable.
57:29Um instead I tried to just go more the
57:30whole country route type of thing and
57:32and it really hurt us. That was a The
57:34second one is is that I was in the wrong
57:36area. I was in a small town in Utah
57:37called St. George.
57:39And that there's no one there that does
57:41investments into the internet at all.
57:44Right.
57:45And so I was in this town where no one
57:47even knew about internet investments.
57:48They knew nothing about it and I was
57:50trying to raise money from people that
57:51were doing construction. And so it was
57:53just a terrible terrible idea. I should
57:55have been in If I was in Silicon Valley,
57:56I would have probably raised five or 10
57:58billion dollars if I wanted to.
58:00Cuz we're grow like we had 80 million
58:02people come on our site. I mean we're
58:03insane growth.
58:05Yeah, I mean the location did matter for
58:07some period of time. Now location seems
58:08to be mattering less and less these
58:10days. People do not perceive that you
58:11have to be in Silicon Valley to build a
58:12unicorn. Tell me about how the SPAC came
58:15along and how you made the decision to
58:16do that because that seems to be at the
58:19sort of key of this story is this bold
58:21move to take a company public without
58:23the product being in market yet.
58:25Certainly the contract, certainly
58:28uh you know, the team, but to go public,
58:31that's the thing you've received the
58:32criticism for, but that's the thing
58:33that's also put a billion dollars in
58:34your bank account and given you the high
58:36ground to actually execute on a
58:38ambitious plan. So when did What is the
58:41background on Who's the maniac who
58:43decided to take this company and say,
58:45"Let's SPAC it." Because that seemed
58:46like the bold move of bold moves.
58:49It was a Look, innovators always get
58:51criticized until they prove them right.
58:53This
58:53Sure. Sure. That's what I'm saying. I'm
58:54I'm framing it as bold, by the way. I
58:56didn't frame it as crazy. I framed it as
58:58bold.
58:59Now you want to
59:00Yeah.
59:00give it a compliment here to Tesla. To
59:02to Elon because every time he does
59:04something you know, a lot of times for
59:05years they would call him crazy and then
59:06he proved it and they're like, "Oh yeah,
59:07he's really smart." But what happens is
59:10like a year prior to going public, I
59:11told my board, "I'm we're going to go
59:13public." And they said, "Not a chance.
59:14You're an idiot." And I said, "Listen,
59:16you got to you got to prom you got to
59:18just trust me. We got to go public. We
59:19need to."
59:21And and they said, "No, never. And not
59:23for like another many many years. And
59:25you got to be revenue. You have to have
59:26like no one ever goes public pre-revenue
59:27and I said I don't care if anyone ever
59:29has. I'm going to. So I I over time I
59:31convinced them and then all of a sudden
59:33um when the WeWork thing happened, the
59:36board was like kind of woken up like oh
59:37my gosh, yeah, it actually is a problem.
59:38We need to think about being more
59:40transparent. How do we do this? How do
59:42we raise money in this in this industry
59:43where um unicorns are being criticized?
59:46So I I uh
59:48um we were dealing with Cowen and Morgan
59:50Stanley and they they brought a person
59:52to us. They said, "Hey, there's this
59:53guy. He was a former former head of
59:54General Motors. He's got an enormous
59:56amount of background. He's run at a
59:58SPAC. He's got a you know, he can help
1:00:00you raise $700 million guaranteed. Um
1:00:03would you meet with him?" And I said you
1:00:05know, I said sure. So Steve Girsky, a
1:00:06guy named Steve Girsky came out to visit
1:00:08us and he brought his entire team of due
1:00:10diligence out to see if we were real.
1:00:13And they spent months on due diligence
1:00:14with us and they came to the conclusion
1:00:16that the Nikola truck was real, that
1:00:18everything was real with it, that the
1:00:19suppliers real, the partnerships were
1:00:20real. They did all the due diligence and
1:00:22and uh they had a $235 million SPAC, a
1:00:25special acquisition company, and then
1:00:27they they were able to bring on another
1:00:28500 plus million on the PIPE investor,
1:00:30which is the follow on investors.
1:00:32So we brought in 700 I think it was a
1:00:34750 million total
1:00:36um going public and that has been
1:00:38monumental because now we got a you
1:00:40know, we have that plus the warrants
1:00:41which gave us a billion dollars of of of
1:00:43cash reserves and today a billion
1:00:45doesn't sound like a lot.
1:00:46No, no, it's a lot.
1:00:47But it's a lot of money.
1:00:49of money for a 400 person company.
1:00:50Usually it would have been doled out in
1:00:52$50 million chunks from this point point
1:00:54forward. $100 million chunks and you'd
1:00:56have to tranche it. This this billion
1:00:58dollars is going to last you two, three,
1:01:00four years. Will it take you to
1:01:01profitability or are you going to have
1:01:02to keep going back to the market and
1:01:04sell more shares?
1:01:05It'll be a couple of years. I mean it
1:01:06took uh you know, most of our
1:01:08competitors are in it over 20 billion to
1:01:0920 25 billion. So it's crazy to think
1:01:12that we can make all that profit without
1:01:14going out again. We are going to go to
1:01:15the market eventually one day to uh to
1:01:17bring in more money. We'd love to have
1:01:19good cash reserves. But the nice thing
1:01:21about our I I'll tell you a I tell
1:01:22everybody. And this is one of my
1:01:24favorite phrases. I said you cannot be
1:01:25environmentally sustainable if you're
1:01:27not financially sustainable.
1:01:30So you you cannot have a business model
1:01:32that's built on credits only. You cannot
1:01:33have a business model that's built on
1:01:34government subsidies. You've got to have
1:01:36a business model that's incredibly
1:01:37profitable without any type of
1:01:39subsidies. And that's how we built
1:01:41Nikola was a very sustainable financial
1:01:44model and also a environmental
1:01:47environmentally sustainable model. And
1:01:48that's where I think the greatest
1:01:50valuations are going to come from in the
1:01:51future.
1:01:53Yeah, and so this the SPAC
1:01:56puts the money in. You have a pipe, a
1:01:58private investment in a public entity
1:02:00that occurs at the same time. But then
1:02:02you sell $70 million in shares at that
1:02:04same time. Is that correct?
1:02:06Yep. Yeah, so
1:02:07do you I mean that's something people
1:02:08were really critical of. Like why, if
1:02:10you're so long the vision, would you
1:02:12take $70 million off the table in, you
1:02:14know, before the product's even
1:02:15launched? That That was a red flag of
1:02:17red flags for me and for others.
1:02:19Yeah, there's a lot of people have asked
1:02:20me and criticized me. And here's the
1:02:22here's the real answer to it. When we
1:02:24did
1:02:25when we were going through this, the
1:02:26PIPE put in all their money at $10, you
1:02:28know, at the $10 share
1:02:30um
1:02:31price essentially, which is the pre-IPO
1:02:33price for everybody. The SPAC put in the
1:02:36thing at $10 as well. And and the the
1:02:39the PIPE, these big funds like Fidelity,
1:02:42P. Sam, you know, all these different
1:02:43groups that were in that are in here,
1:02:45BlackRock, all these other groups, they
1:02:47came in and they said, "Look, you got
1:02:49too much control, way too much. You own
1:02:51the board. You own
1:02:52What was your ownership at that point,
1:02:54percentage-wise, ballpark?
1:02:55Well, I gave up a lot. So I had 70% of
1:02:57the company and I gave about 30 to my
1:02:58employees.
1:02:59I wanted them to all become rich. And so
1:03:01I gave I wanted them all become, you
1:03:03know, I don't want all the money myself.
1:03:04I want to share it with I want to share
1:03:06it with people that are that have
1:03:07So you granted a 30% employee stock
1:03:09option pool and and
1:03:10Well, I gave away probably about 15%
1:03:14directly and then the other 15% through
1:03:16the option. So it was it was over 30% of
1:03:19my stock was diluted. It was
1:03:21taking off 30% of the top to to those
1:03:23guys.
1:03:25And I still had 40% of the company.
1:03:27Yeah.
1:03:27And
1:03:28and I'll make, you know, hundreds of
1:03:29people wealthy in their generations to
1:03:31come after it. And that's what I like in
1:03:33life. But, the answer to the why the
1:03:34stock was sold is they came to me and
1:03:36said, "Look, we want you to We don't
1:03:38want you to be the CEO and the executive
1:03:39chairman. You got to choose one or the
1:03:40other."
1:03:41And I And I asked them why. I said,
1:03:43"What's your reason?" And they said,
1:03:44"Well, it's not healthy to have one
1:03:46voice everywhere to control everything."
1:03:48And I said, "I can see that. There's
1:03:49actually some wisdom in that." Um
1:03:51and I've always done everything where
1:03:53everything I've ever done with the board
1:03:54has always been unanimous consent, which
1:03:56means I've I've successfully convinced
1:03:58my board to do something every one of
1:03:59them. I don't ever overrule my board. If
1:04:01If someone doesn't like something, I
1:04:02want to know why. I'm a very objective
1:04:04guy. People may not think this, but I I
1:04:06won't do something if even one of my
1:04:08guys objects to it. I want to find out
1:04:10why. And I And if I can't convince him,
1:04:12then I won't be able to convince the
1:04:12market. So, when they came to me and
1:04:14they said that, I was like, "Okay,
1:04:17I understand." And they said, "We want
1:04:19you to have a We want you to be locked
1:04:20up longer. We want you to be here for a
1:04:22long period of time. We want you to take
1:04:24$1 salary.
1:04:27And And also the whole executive team."
1:04:29This is what's not This is what This is
1:04:30what no one ever reported on. All they
1:04:32did is report on the bad, right? Cuz it
1:04:33gets headlines. So, the entire executive
1:04:35team came in and said, "Okay, we're
1:04:37going to take $1 salary.
1:04:39And that's And we get stock bonuses.
1:04:40That's it." And
1:04:43And they said, "Trevor, we want you to
1:04:44reduce down some of that some of that
1:04:46control." And And they said, "We'll buy
1:04:47some of those shares from you so you can
1:04:49live on this so you're not focused on
1:04:51money during the time that you are
1:04:53running this company. We want you to
1:04:54have some money out now. It's smart. And
1:04:56we want you to focus on Nikola, not
1:04:57focus on how you're going to pay your
1:04:58bills or pay for your house or whatever
1:05:00else."
1:05:01So, they came in and they they offered
1:05:03to buy as part of that deal, they
1:05:04offered to buy $70 million of my shares
1:05:06at the exact same rate they paid for
1:05:07everything else.
1:05:08it wasn't anything nefarious of it. Just
1:05:10the the accept the signal of oh, he's
1:05:14selling his shares. But um it wind up
1:05:17being 7% of the total proceeds or
1:05:20ballpark of that of this whole thing.
1:05:21So, it's not like it's outrageous. It is
1:05:24life-changing money, certainly. It's
1:05:25it's not it's not chump change.
1:05:27Yeah.
1:05:27But you're still have 30% of the company
1:05:29or something to that effect? 20 or 30%?
1:05:31more right now. So, that we we I made a
1:05:33you know, I I put this out there so
1:05:35everyone would know so I wouldn't get
1:05:36sued. Um I put it out there that the
1:05:38board has released me to be able to
1:05:39borrow on up to 16% of my shares, which
1:05:42is a couple hundred million dollars
1:05:44worth of uh worth of
1:05:45You own 30% of the company now?
1:05:46I about yeah, somewhere slightly below
1:05:49the 30% mark. And my goal is to get up
1:05:51to My goal is to try to over time is to
1:05:54buy up to about 35%.
1:05:56Got it. So, you sold some, but now
1:05:58you've got conviction again and you're
1:06:00buying again.
1:06:00Well, I've always had conviction, but
1:06:02it's the difference is now is that I've
1:06:03got uh you know, when you're when you
1:06:05It's smart Every investor in the world
1:06:07will tell you you should take some off
1:06:08the table. Every investor.
1:06:10Yeah.
1:06:10No, like anyone who tells you you should
1:06:11never have anything off the table is an
1:06:13idiot. Like it's just a flat-out idiot.
1:06:15They should never be given advice on
1:06:17is a cornerstone of any uh wealth
1:06:19accumulation strategy, for sure. Uh But
1:06:22you so now you have the ability to buy
1:06:24tight on money.
1:06:25But you're taking loans against your
1:06:27equity holdings to buy more equity.
1:06:29That's considered a very high-risk
1:06:31behavior, isn't it? Like that's taking
1:06:33margin.
1:06:34No, very small amount. We're talking 16%
1:06:3716% and I so it would have to collapse
1:06:41by over 80 for me even be affected. And
1:06:43I've got money to buy those out. If it
1:06:45collapse that low, I just buy them out.
1:06:46I got cash. So, there is zero risk for
1:06:48me to do this. It just it's a big
1:06:50commitment, but it's no risk. It just
1:06:51means I would lose my my huge, you know,
1:06:53my my nice nest egg. But I've already
1:06:55got my house paid for. I've got my
1:06:56things paid for. Like I'm okay to take
1:06:58that risk. I believe in the company.
1:07:00It's all right.
1:07:01What what do you need to prove this year
1:07:03to convince the naysayers? What do you
1:07:04think in the next year or two.
1:07:08You need to prove the business model out
1:07:12and also to, you know, sort of satisfy
1:07:14the the naysayers out there.
1:07:16Yeah, I think there's probably two or
1:07:17three things that are really important.
1:07:18Number one is the OEM partnership with
1:07:20the Badger. So, people can actually see
1:07:22who's going to be the OEM that comes in
1:07:23and works with us on the Badger so we're
1:07:25not out billions of dollars trying to
1:07:27build a car that everyone else was
1:07:28losing money on.
1:07:29Got it.
1:07:29So
1:07:29So, if that comes out and it's like a
1:07:31Toyota or it's like somebody who's built
1:07:34a lot of trucks, you're going to look or
1:07:35Jeep or something or I don't know who's
1:07:37the big truck builder.
1:07:39You're going to look That's going to
1:07:40help validate, correct?
1:07:42You're We're going to look really good.
1:07:44Got it.
1:07:44If that if if that happens, which we
1:07:45believe it will from where we're at
1:07:47right now,
1:07:48if that happens then I would I would I
1:07:51would I cannot give you any advice on
1:07:52where it's going to go, but I'd see our
1:07:53I'd see our company value
1:07:55it's not it's not closed.
1:07:57The deal isn't closed. You're working on
1:07:58it.
1:07:59We have three offers on the table right
1:08:01now and all we have to do is sign
1:08:02paperwork. So, we're trying to validate
1:08:03which one is the best one for us.
1:08:05Oh, that's good. Uh-huh.
1:08:06So, yeah. We have and some of them bring
1:08:08other things that are better than
1:08:09others. So, we might not take the one
1:08:10that gives us the most money, but we'll
1:08:12take the one that gives us the best
1:08:14chance of being successful in the long
1:08:16run. So, we've got three term sheets
1:08:18right now on my desk that are that are
1:08:21that are essentially ready to be signed.
1:08:23So, getting that Badger out getting the
1:08:27announcement about who's going to build
1:08:28the Badger for you would be
1:08:30That's the big one, okay?
1:08:31That Well, that's one of them. The other
1:08:32one is getting the the the first ever
1:08:34battery-electric semi-truck on the on
1:08:35the road being tested like in ahead of
1:08:38Tesla, ahead of everybody. This is like
1:08:39the production, you know, really real
1:08:41production version, not a prototype. And
1:08:43those come out in the next There's
1:08:45actually five of them coming off the
1:08:46assembly line right now in our factory
1:08:48in Ulm, Germany. So, we have a factory
1:08:51in Ulm and that's spitting the first
1:08:52five off right now. We're going to go
1:08:54out and test the heck out of them and
1:08:55after that comes hundreds and after that
1:08:57comes thousands. So, if we deliver those
1:08:59five right now this year, it's game
1:09:00over. Nikola is going to be where, you
1:09:02know, it's on the trajectory of where
1:09:04our competitor is.
1:09:05That That being Tesla, $250 billion, 25x
1:09:08where you are currently today.
1:09:10Um when those
1:09:12those trucks come out, they already have
1:09:15a a buyer has already bought them or
1:09:17they're just you'll just use them and
1:09:19and use them to
1:09:21um sell more trucks.
1:09:23No, those five are the are the hardcore
1:09:24testing ones where you'll have them in
1:09:25the hands of like fleets and your sell
1:09:27your team and your and other fleets. So,
1:09:29this is where people can actually get in
1:09:30and drive them with loads and it's safe.
1:09:32Got it.
1:09:33there's one reason why you don't see us
1:09:34or Tesla to to actually allow any fleets
1:09:37to drive our trucks. They're not They're
1:09:39not safe to put in someone else's hands
1:09:41because there's a lot of like it's a
1:09:42it's a very like it's a it's a very
1:09:44advanced prototype, but it's not made to
1:09:45just hand over to someone. So, these are
1:09:48what actually made to where you can let
1:09:50someone just jump in and drive them.
1:09:51Got it.
1:09:52Uh what are the chances that the Oh, is
1:09:54there anything else on that Do you know
1:09:55those are top two or is
1:09:56is is the third one's Nikola World. So,
1:09:59at Nikola World December 3rd, 4th, and
1:10:015th when we unveiled the Badger, we show
1:10:02off all of our other product lines.
1:10:04That's where people get to see the
1:10:06Badger become real for the first time.
1:10:08So, a lot of people have said that our
1:10:09our pickup truck is fake, it doesn't
1:10:10exist, and it it's real. It takes 2
1:10:13years to build a prototype, you know,
1:10:14like that that advanced it fully works.
1:10:16So, our when you see our truck in
1:10:18December, it's even further along than
1:10:20anything that even like Rivian's ever
1:10:21built or Tesla's ever built on a truck
1:10:22level. It is I mean, it's stamp panels,
1:10:25it's it's beautiful, it's done done,
1:10:26it's gorgeous. And so, we've
1:10:28And you were able to leapfrog Rivian and
1:10:31Tesla because you've got a partner who's
1:10:33already built all these pieces. You're
1:10:34not starting from the ground up. You're
1:10:36just putting your intelligence into it.
1:10:38That's part of it, but it's actually our
1:10:40chassis that that they're going to help
1:10:41us commercialize it. So, we What we did
1:10:43is we did like the first 50% of it and
1:10:45then they came in and they said, "Hey,
1:10:46you know what? We'll throw our 20,000
1:10:47people at it that are truck experts and
1:10:50you'll have the best made truck on the
1:10:51planet Earth." And that's why.
1:10:54Um here's a a silly question perhaps, or
1:10:57maybe deadly serious. Um
1:10:59You took money from OEMs who invested in
1:11:02the company, right? Some number of
1:11:04trucking companies and other folks,
1:11:05battery companies,
1:11:07cell companies, I believe other folks
1:11:09invested. Are you worth more in terms of
1:11:11a market cap than them in this crazy
1:11:13stock, you know, days?
1:11:15Yeah, we are. So, like Worthington,
1:11:18Worthington invested in us and they're
1:11:20they're worth three or four billion.
1:11:21We're worth three or four times them and
1:11:22they got a billion-dollar return out of
1:11:24it.
1:11:25You think about some of the other guys,
1:11:26not Bosch. Bosch invested 130 million in
1:11:28us and they're still worth more than we
1:11:30are, but I would see in the next year
1:11:32I'd see the ability for us to be worth
1:11:33more than Bosch.
1:11:34So, Worthington Worthington was the
1:11:36truck company? Is that Is that the name?
1:11:38No, Worthington Worthington was a metal
1:11:40company. They're
1:11:41So, now with this market cap, why don't
1:11:43you just go wrap back around, circle
1:11:44back around, and buy some of these OEMs
1:11:46and then you got the full stack?
1:11:48You could, but they got the legacy of
1:11:50diesel and I don't want to ever be
1:11:51associated with building diesel trucks.
1:11:53All right, that makes sense. And then
1:11:55when if you were to guess when the
1:11:57United States tips over and we have less
1:12:01diesel trucks and more,
1:12:03you know, battery and hydrogen trucks,
1:12:05what year will that happen?
1:12:07Are you talking about being sold or
1:12:08actually on the road?
1:12:09I'd say on the road in use, yeah.
1:12:11Okay, on the road, 10 years. Sold,
1:12:14probably three.
1:12:15Got it. So, in three
1:12:16Cuz it takes
1:12:17It takes Usually people buy three to six
1:12:18years in advance. So, because of those
1:12:21lease cycles, so we're we're it's By the
1:12:23time everyone places all their orders
1:12:24which are coming down the line right
1:12:25now,
1:12:26it's going to take six years to start to
1:12:28deliver that and then I think you're
1:12:30going to see a majority coming out
1:12:32within within 10 years, but sold within
1:12:34probably half that time.
1:12:36So, we get to the majority in 10, which
1:12:38means then the life cycle of the dirty
1:12:41trucks, you said it's like three four
1:12:42years cuz these things get beat to all
1:12:44hell, right?
1:12:45They're usually seven years. They go
1:12:46through two leases, usually two leases
1:12:48of three years a piece.
1:12:49So, in 20 years is it conceivable that
1:12:51we just won't have diesel trucks
1:12:53anymore?
1:12:54You'll have some still, but I would say
1:12:55it's going to be damn hard to ever buy a
1:12:57diesel after and within with 3 years
1:12:59from now
1:13:00almost no fleets will ever touch a
1:13:01diesel again. Buy I'm talking about
1:13:03buying buying new diesels. They'll
1:13:05they'll still use the existing ones that
1:13:06are in the market, but they'll never I
1:13:08don't think you're going to ever see
1:13:09anyone ever touch a diesel after buying
1:13:11a diesel after the next 3 to 5 years.
1:13:13Uh
1:13:14what are the chances that Tesla semi
1:13:16truck goes with swapping the battery
1:13:19packs? Cuz I remember in the early days
1:13:22uh they Tesla showed the Model S
1:13:25swapping the battery packs at stations
1:13:27and that was potentially going to be a
1:13:28thing, but I think supercharging
1:13:30just took away the the need for that.
1:13:32The idea was you would pull into your
1:13:34you know, on the way to Tahoe you'd just
1:13:35take your battery out, they put another
1:13:37battery in, it takes 5 minutes, and then
1:13:38you're back on the road instead of the
1:13:4020-minute, 30-minute top-off experience
1:13:42that most of us have today um or going
1:13:44to Vegas or whatever, but just seemed
1:13:46totally unnecessary. So, but with it's
1:13:48with the trucks
1:13:50you know, if you have three of those
1:13:52uh you know, I I I don't think they want
1:13:54the truck stopping for an hour. So, to
1:13:55swap out the three really quick
1:13:58does that make sense? Or
1:13:59Yeah, it's a big problem, actually.
1:14:01Here's the reason why.
1:14:02If you take that the Tesla's battery
1:14:04cell cost right now at a buck 75, their
1:14:06their total cost of a complete battery
1:14:09to do the range they talk about, their 3
1:14:11to 500-mile range, um would be between
1:14:13110 and 125,000
1:14:17um with the battery housing included.
1:14:19So, you're if for every truck you build,
1:14:22you're 125,000 on the battery, and then
1:14:24you have to have another 125,000 battery
1:14:26on the side just waiting for it. That's
1:14:28never fully utilized. It's only utilized
1:14:2925% of the day. So, you have an a
1:14:32resource that's only being utilized at
1:14:3425% capacity
1:14:36that is waiting for a truck to come to
1:14:38it. And so, in instead of your cost
1:14:40being 160,000 a truck, now your cost is
1:14:42285 or 290,000 a truck. So, it it's a
1:14:46we've already ran all the numbers. It's
1:14:47actually why I was explaining to people
1:14:49why you can't do battery buffering for
1:14:50for semi trucks on the grid because
1:14:52you're for every truck you have that's a
1:14:54megawatt hour of energy, you've got to
1:14:56have a mega over a megawatt hour of
1:14:58energy in storage, which is going to be
1:14:59a you know, you got to add another
1:15:01$120,000 onto that. And you've
1:15:04essentially you know, now your truck is
1:15:05costing more than a hydrogen truck.
1:15:08All right. Well, it's going to be an
1:15:09incredible
1:15:11couple of years and we'll be watching
1:15:12and hopefully have you on in exactly a
1:15:14year. I asked my team to uh put a or
1:15:17maybe actually after the pickup truck we
1:15:18can talk a little bit.
1:15:19what? Come right after Nikola World.
1:15:21That'll be We ought to get you out to
1:15:23Nikola World. You ought to come to that
1:15:24event.
1:15:24Where is that going to be? Arizona?
1:15:26Here in Phoenix, Arizona and it is going
1:15:27to be a rockstar event. I promise you
1:15:30that you will not want to miss that.
1:15:31All right. Well, there you have it,
1:15:32folks. Trevor Milton from Nikola Motors.
1:15:34A lot of you have asked to have him on
1:15:35the pod and and here he is. He's on the
1:15:37pod. Uh good luck with everything and
1:15:39Appreciate it. Good luck with that.
1:15:40Thank you. I love it all.
1:15:41Cheers. Bye.

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