How Trevor Milton Went From A College Dropout To Running A $3 Billion Hydrogen Truck Company

By Amit Chowdhry ● September 9, 2019
  • Nikola Motor recently announced it raised $250 million in strategic funding from CNH Industrial at a pre-money valuation of $3 billion. These are the details behind the deal.

CNH Industrial N.V. recently announced its intention to enter into a strategic and exclusive Heavy-Duty Truck partnership with Phoenix-based Nikola. Nikola’s strategic near-term project milestones include the industrialization of the Nikola TWO fuel cell- powered Class 8 truck for the North American market as well as the integration of IVECO S-Way truck technology into the battery-electric powered Nikola TRE cab-over model for both the North American and European markets.

Nikola is planning to accelerate industry transformation towards emission neutrality of Class 8 / Heavy-Duty Trucks in North America and Europe through the adoption of fuel-cell technology. And Nikola’s zero-emission Heavy Duty Trucks are powered by proprietary hydrogen fuel cell and battery technology and will be the first-to-production.

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Nikola’s disruptive business model foresees an industry-first ‘all-in’ lease rate — which includes vehicle, service, maintenance and fuel costs, providing long-term total cost of ownership certainty at or below diesel costs.

CNH Industrial will take a $250 million strategic stake in Nikola as the lead Series D investor — comprising of $100 million cash and $150 million in services — such as product development, manufacturing engineering, and other technical assistance as well as supply of certain key components to accelerate the production timeline of the Nikola TWO and Nikola TRE.

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The pre-money valuation was set at $3 billion and Nikola anticipates raising over $1 billion in the D round granting approximately 25% ownership to new investors and business partners including CNH Industrial.

IVECO and FPT Industrial — the commercial vehicle and powertrain brands of CNH Industrial respectively — will assist in engineering and manufacturing expertise to industrialize Nikola’s fuel-cell and battery electric trucks. And The following vehicles will benefit from this partnership: the Nikola ONE (NAFTA-compliant Class 8 sleeper truck), the Nikola TWO (NAFTA-compliant Class 8 day-cab truck), and the Nikola TRE (European compliant cab-over Heavy-Duty Truck).

Nikola is going to contribute technologies for a European Joint Venture with CNH Industrial that will include class-leading fuel-cell expertise, e-axles, inverters, independent suspension, on-board hydrogen fuel storage, over-the-air software update functionality, infotainment, vehicle controls, vehicle-to-station communication protocols, power electronics, and access to a hydrogen fueling network.

The fuel-cell technology is the logical next step to liquefied natural gas (LNG) powered engines as it builds on existing refueling networks thus enabling local on-site production of hydrogen. And the FPT Industrial has been at the forefront of alternative propulsion solutions for over two decades, having produced some 50,000 natural gas-powered engines to date. Plus IVECO is the absolute European leader in natural gas vehicles with about 28,000 of its trucks and buses powered by FPT Industrial engines.

Nikola’s strategic near-term project milestones include the industrialization of the Nikola TWO fuel cell- powered Class 8 truck for the North American market as well as the integration of IVECO S-Way truck technology into the battery-electric powered Nikola TRE cab-over model for both the North American and European markets.

In the long-term, a European Joint Venture will cover battery electric vehicles (BEV) and fuel-cell electric vehicles (FCEV) launched by Q4 2022. And Nikola plans to leverage IVECO’s European sales, service and warranty channels to accelerate access to the European market.

“The time has come to finally provide a zero-emission solution to the heavy-duty truck market. While other OEMs believe zero-emission solutions cannot happen in the timeframe regulators have mandated, Nikola, FPT Industrial and IVECO are proving that these timelines are not unreasonable,” said Nikola Motor Company CEO Trevor Milton. “Nikola has the technology but needs a partner with a European network to achieve it in a timely manner. With CNH Industrial’s investment and partnership, we can now bring zero-emission trucks to Europe. It is exciting to see IVECO taking the lead in providing zero-emission solutions in Europe through its partnership with Nikola. By bringing CNH Industrial on board, we now have access to manufacturing know-how, purchasing power, validated truck parts, plant engineering and much more. Few will doubt our ability to commercialize a truck now.”

Milton is a 37-year-old college dropout originally from Utah and this investment in Nikola will see his net worth surpass $1 billion, according to Forbes. Forbes estimates that Milton has a stake of more than 40% so his net worth is hovering around $1.1 billion. Prior to the CNH investment, Milton owned less than 50%. And the value of this stake will grow significantly more if the company raises the additional $750 million as part of the target.

Prior to launching Nikola, Milton worked at Worthington Industries. And he also worked in R&D, product development, and OEM sales at dhybrid Systems (acquired by Worthington Industries). Worthington Industries provided seed capital for Nikola several years ago. ValueAct Capital and NEL Hydrogen are also investors in Nikola.

Milton had gained an interest in transportation while taking train rides with Union Pacific as that is his father’s employer. After losing his mother to cancer as a teenager, Milton did some missionary work in Brazil to gain perspective on life. In 2015, Milton had launched Nikola and moved the company from Salt Lake City to Phoenix a few years later in order to easier find engineering talent.

“The increasing focus on the recognition that there needs to be fundamental reductions in automotive emissions is driving our industry to rapidly seek advanced technological solutions. IVECO is now ideally placed to offer customers an even wider range of transport solutions including natural gas, electric and fuel-cell powered vehicles,” added CNH Industrial chief executive officer Hubertus M. Mühlhäuser. “Nikola’s choice of IVECO as its strategic partner is testament to our internationally recognized excellence in heavy duty trucks and alternative powertrain technologies.”

Nikola is actively working with partners to develop the required hydrogen refueling infrastructure in North America and Europe. Some of Nikola’s partners include industrial giants like Bosch, Meritor, and WABCO.

“Global climate change, geopolitical conflicts, future availability of fossil fuels and a self-aware circular economy all call for a fundamental change in how we operate,” explained CNH Industrial president commercial & specialty vehicles Gerrit Marx. “While today LNG delivers significantly lower well-to-wheel emissions, in the medium to long-term, fuel-cell and BEV technologies will deliver the ultimate goal of zero-emission trucking. With our LNG technology we have proven to be European disruptors, taking the lead in industry transformations including fuel supply and lifecycle ownership.”

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