Semi-Trucks New Generation – Tesla or Nikola?


Nikola revealed its electric semi-truck, the “Nikola One” on December 1, 2016, with a statement that it will revolutionize the transportation industry. A year later, Tesla revealed their semi-truck and declared the same. Nikola didn’t like the very resembling semi-trucks of Tesla and filed a lawsuit against Tesla, claiming they copied their design.

Although both Nikola’s and Tesla’s semi-trucks seem to be offering the same product – they don’t.

While several companies like Tesla, Daimler, Freightliner, and other established players and startups are working on all-electric trucks, Nikola is one of the only ones pursuing hydrogen-powered big rigs.

Hydrogen-powered vehicles have never really caught on in the passenger car space because there has been very little investment in the necessary infrastructure. Where companies like Tesla and multiple governments and clean energy groups have spent the last decade building out relatively vast networks of electric vehicle chargers, only 45 Hydrogen Fueling Stations exist to date in U.S and Canada. That’s about to change as Nikola plans to create a network of hydrogen fueling stations across Canada and the US, numbering more than 300 giving the company the largest hydrogen network in the world.

Nikola has argued that hydrogen power makes more sense in a commercial application. Since many commercial trucking routes run point to point, it’s easier to identify where hydrogen stations should be built. According to Nikola, there are few more reasons why hydrogen-powered trucks are preferable than batteries-based trucks; First, it takes far less time to fill a tank than it does to charge a massive battery. Second, battery-powered big rigs also need big battery packs to generate sufficient range, especially with a trailer attached. But the bigger the pack, the more the truck weighs, ultimately limiting how efficient it can be.

Tesla, on the other hand, claims to be more efficient in terms of cost-per-mile, which makes their trucks more attractive than Nikola’s.


# Technologies

while there are many brands of an electric car to choose from, there are only two choices when it comes to powering electric vehicles: fuel cells or batteries. Both produce electricity to drive electric motors, eliminating the pollution and inefficiencies of the fossil fuel-powered internal combustion engine. Both hydrogen and electricity for batteries can be produced from low or zero-carbon sources, including renewable energy like solar and wind, and therefore both are being pursued by car manufacturers and researchers as the possible future of electric vehicles.

However, a great debate is being waged by supporters of each technology. Elon Musk has called hydrogen fuel cell technology “incredibly dumb,” claiming they’re more of a marketing ploy for automakers than a long-term solution. In contrast, Japan has announced its intention to become the world’s first hydrogen society, with the Japanese government and the auto industry working together to introduce 160 hydrogen stations and 40,000 fuel-cell vehicles by March 2021. So, which is actually better?

# Refuel Time

A hydrogen fuel cell vehicle can be refueled in under 5 minutes. According to Nikola, their trucks can be refueled in 10-15 minutes, where a battery-powered electric vehicle, like the Tesla Model S, takes over 3 hours to fully recharge.

For refuel times, Nikola wins.

# Cost Per Mile

Cost per Mile is something that companies who have commercial trucks keep a very close eye on. The average electricity rate (for April 2020) is around 13 cents per kilowatt-hour (kWh). Let’s try to calculate the cost-per-mile for Tesla and Nikola trucks and compare between them:

TeslaAccording to Tesla’s website, the energy consumption of their semi-truck is less than 2 kWh-per-mile. Let’s assume a reasonable charging efficiency of 90%, and this gives us a cost-per-mile for Tesla’s semi-trucks of 7.2 cents. [calculated by (0.13/0.9) / (2)]

NikolaHydrogen has yet to get down to an efficient level at the moment. According to California fuel cell partnership, the Hydrogen fuel prices range from $12.85 to more than $16 per kilogram (kg), but the most common price is $13.99 per kg.

Hydrogen gas has a fuel value of about 33 kWh per kg. So, at 100% efficiency, you would need 1/33 kg (about 0.03 kg) of hydrogen to get 1 kWh from a fuel cell.

But, a fuel cell is far from 100% efficiency. The theoretical maximum efficiency of a fuel cell is around 83%, So theoretically you need (1/33) / (0.83) kg. This is about 0.04 kg.

And in reality, you’re unlikely to get even 50% efficiency. So, it’s more like 0.06 or 0.07 kg of hydrogen, which gives us a cost-per-mile of 85 cents per mile for Nikola’s semi-trucks.

It is important to note that while the future price of hydrogen is uncertain, NREL (The National Renewable Energy Laboratory) estimates that hydrogen fuel prices may fall to the $10 to $8 per kg range in the 2020 to 2025 period.

For Cost-per-Mile, it seems like Tesla is the clear winner.

A comparison between Hydrogen-electric, 100% Battery Electric, and Diesel (taken from Nikola’s website):


# Price Tag

Tesla’s Semi truck priced starting at $150k for the 300-mile model and $180k for the 500-mile model.

Nikola’s Semi truck costs $375k.

Both Nikola’s and Tesla’s semi-truck costs much higher than diesel engine trucks. Nikola’s truck costs more than double the cost of Tesla’s truck. It is unknown whether Nikola’s production’s efficiency will improve, reducing the cost of its trucks.

# Summary

Tesla, a well-known brand with firm infrastructures and budget are a tough competitor, but it seems that Nikola, only 5-years old start-up, can really change the industry with its revolutionized hydrogen fuel-cell technology. But for now, it doesn’t make economical sense to buy Nikola’s truck compared to Tesla’s, as the price tag of Nikola’s trucks is much higher and so do its cost-per-mile.

Nevertheless, Nikola wants to start production of its battery-electric big rigs in 2021 and expects to deliver 600 of them. It will then double that number each year following as it brings production of the hydrogen trucks online in 2023. According to Nikola, they expect to be able to generate $3.2 billion in revenue in 2024 by selling 7,000 battery-powered trucks and 5,000 hydrogen trucks. The company said it has secured more than 14,000 pre-orders from industrial clients, which represent over $10 billion in potential revenue and will keep the factory busy for at least 2.5 years.

Nikola has made its market debut through a merger with a special-purpose acquisition entity called VectoIQ Acquisition Corp in a deal valued at $3.3 billion. The market believes in Nikola and its semi-trucks, and we too think it has great potential, but the infrastructures must be well-established first.

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