Iveco Group and Nikola Corporation announced today that their partnership (started in 2019), related to zero-emission heavy-duty (Class 8) trucks in North America and Europe, has entered a new phase.
One might think that maybe there is some new joint project on the horizon, but actually, it’s the opposite, as the two partners intend to concentrate on their own battery electric and fuel cell electric truck projects (Iveco Group in Europe, and Nikola in North America).
According to the press release, each company is now eager to sharpen its own focus on heavy-duty transport.
One of the main points of the agreement is that Iveco Group will assume full ownership of the joint venture in Ulm, Germany (pending regulatory approvals). Additionally, Iveco Group “will be licensed to freely access and continue developing vehicle control software for the jointly developed BEV and FCEV.”
On the Nikola side, the company “will be granted the IVECO S-Way technology license for North America and related component supply from Iveco Group, and will gain joint ownership of the intellectual property of Generation 1 eAxles, technology developed together with Iveco Group’s powertrain brand, FPT Industrial.”
In other words, it sounds like they began to part ways in a controlled manner to limit negative effects. Nikola trucks still will be based on the Iveco S-Way platform, so the company will continue its business with a focus on North America.
“Iveco Group will cover the capital outlay related to this new phase of collaboration through its available liquidity, acquiring the above-named items partially in cash (USD $35 million) and partially in Nikola shares (20 million of shares). Despite the negative cash impact generated, Iveco Group forecasts to absorb it with cash flow generation and therefore this does not change its cash flow target for 2023; it will also retain a meaningful amount of Nikola shares.”
We guess that when CNH Industrial (owner of the Iveco truck manufacturer and the FPT Industrial powertrain brand) invested an initial $250 million a few years ago, they expected a more fruitful partnership (and less drama related to Nikola’s CEO).
However, the electrification business is challenging. Nikola noted over $50.8 million in revenues in 2022 (up from $0 in 2021), while its net loss was over $784 million (up from a net loss of over $693 million).
Nikola Corporation, which has its own manufacturing site in Coolidge, Arizona (series production started on March 21, 2022), reports that in Q4 2022 produced 133 all-electric Nikola Tre BEV trucks, out of which 20 were delivered to dealers. It’s expected that in 2023, 250-350 vehicles to be delivered to dealers.
In the case of the hydrogen fuel cell version, as of February 21, Nikola reported that it “completed the build and commissioning of 17 FCEV beta trucks and are now in the process of building 10 gamma trucks”. Deliveries to customers are scheduled for the second part of this year with a plan to deliver 125-150 units in Q4 2023.
Let’s take a look at the Coolidge site, as of May 8, 2023 in Bear’s Workshop‘s latest drone flyover: