Nikola debuts on Nasdaq, how it plans to compete with other electric truck makers

Trevor Milton, Nikola founder, joins Yahoo Finance's Alexis Christoforous and Brian Sozzi, to discuss its Nasdaq debut,

Video Transcript

BRIAN SOZZI: Staying in the car beat, electric and hydrogen-powered automaker Nikola has officially combined with VectoIQ Acquisition Corporation. The combined company's shares will trade on the NASDAQ under the new ticker symbol NKLA. Here with us now is Nikola Founder Trevor Milton.

Trevor, big day for you today. One of your early investors at ValueAct, Jeff Ubben, has called you a potential $100 billion valuation company. How do you get there? And why does that sound-- how can you achieve that?

TREVOR MILTON: Yeah, it's a big day today, obviously. We're traded on the NASDAQ finally. So today's our first day on the NASDAQ, NKLA. And to answer your question, how you get there is because we vertically integrated the entire supply chain.

It's very similar to Amazon. In Amazon, you when you buy something, they handle everything, from the warehousing of it to the packaging of it to the shipping of it to the delivery of it, the whole thing. That's what sets Amazon apart from everyone.

Nikola is very similar. In the trucking world, everything is split up. And so when you buy our truck, you get the truck, you get all the fuel with it. It's all zero-emission. And then you end up getting all the service warranty maintenance also.

So by vertically integrating the whole supply chain, we make five times more revenue than our competitors per truck sold.

ALEXIS CHRISTOFOROUS: Trevor, I know a number of companies are trying to come out with these all-electric trucks. You've got Tesla, Daimler, Freightliner. Yours, though, is the only one that's hydrogen-powered. It's a hydrogen-powered big rig.

I know you had some big name clients lined up preordering some of these, including Anheuser-Busch. Given the pandemic, though, have those orders changed? Are people pulling out of those orders, or are they saying we need a little more time before you actually deliver the truck? What does demand look like right now?

TREVOR MILTON: No, I'd say it's probably gone up. The reason that we've seen so far is that people have kind of correlated the sicknesses around the world with a lot of emissions. And you've seen all the countries actually double down on their emission requirements and say this is a huge part of the problem. So we need to fix it.

So Nikola offers both, actually, hydrogen trucks and also battery-electric trucks. So we compete with Tesla and Daimler, obviously. Not just compete. I would say that we're actually the-- we are the very first OEM in the world with a full-production, class A, zero-emission semi truck coming to market.

So next year, our trucks come off the assembly line. And we're the first company in the world with a full production line on our semi truck. So we beat everyone to it. And then we have our hydrogen truck coming the year after.

So I think that's why there's been so much excitement about Nikola, is we don't just cover one part of the market. We essentially allow people to have either option-- both battery electric for up to 300 miles and then hydrogen for over 300 miles of range.

BRIAN SOZZI: Trevor, the last number I saw on Nikola, you had 14,000 preorders, representing close to $10 billion in revenue. What's the latest number?

TREVOR MILTON: That was actually quite a while ago. We stopped taking orders for a period of time. It was ultimately what happened was fleets were being told there were going to be five years out. And that's just too far to plan.

So once we hit about $10 billion in orders, we were just making people mad. So what we did is we just kind of put a stop to counting the numbers. If we are to open all those order books up right now with all the people that have said, hey, we want these trucks, you would see a much, much, much higher number than that. But it just ultimately just made people mad waiting that long.

ALEXIS CHRISTOFOROUS: Trevor, hydrogen-powered vehicles have never really caught on in the passenger car space. Why is that, first off? And do you think that that might change over the next decade or so?

TREVOR MILTON: Yeah, so in the passenger car, it's a little more difficult, because the cost of a fuel cell is pretty expensive. And so it doesn't-- you don't have an economic return on that. And so it becomes more of a philosophy or a belief to own a hydrogen vehicle on a passenger car level. They are awesome. I think the cost will come down eventually.

But what Nikola solved was the cost-- was the economics on the trucking. When we first started, hydrogen was $16 a kilogram. We can now produce it for well under $4 a kilogram.

So we've cut-- it's one quarter of the cost now than it was just a few years ago. And we're now cheaper to operate per mile than diesel.

And I think that's the key why. And with a semi truck, you're making that money back on a daily basis. So people, if there's an X amount of premium on the truck, over a period of a few months or a year or whatever it may be, they can have all their money back already. It's a return on their investment.

And it's because that vehicle makes them money. That's why it's been so successful finally.

BRIAN SOZZI: Trevor, people close to you know you as a person of great faith. What have you told your 350 employees about the unrest, the social unrest sweeping the country? But importantly, what are you building in terms of diversity as you scale this company up? You're in a very unique position-- a lot of orders, really key business. But how are you building that into the DNA of the company?

TREVOR MILTON: Yeah, from day one you'll see that. Nikola was founded that way from day one around the employees are family. And when you have family, you don't look at them any different than you-- you know, my family's my family regardless of who they are, right? And I think that's what's amazing, is that there is no difference between anyone inside of Nikola. We have an enormous amount of diversity here, probably one of the highest women to men ratios in the entire automotive industry, which I'm really proud of.

Hard part is you can't-- there's so many people out there looking for great diversity inside of culture that it becomes harder and harder to maintain that culture. And I think that's what's cool about Nikola, is we're-- from day one, we've just been a mix of everything around the world. And we just treat everyone like family.

I mean, here at Nikola, there's-- nothing is tolerated ever. Someone's ass would be out the door so fast if they ever discriminated or harassed someone. It wouldn't even take two seconds. I don't care who they are or how long they've been here. They'd be gone.

And for me, that's one of the things that I think people here at Nikola know, is I-- I mean, when we have company barbecues, I'm the one-- I'm the one flipping the burgers for everybody. It's you gotta serve your people. If you don't serve them, you can't love them. And I think that's a big thing.

I mean, I'm a big believer. Faith's a huge part of my life. And you truly can't love people unless you serve them. So I serve my employees every day. And they know that. And that's one of the reasons why you see such good morale here at Nikola.

BRIAN SOZZI: That's certainly good to hear. Trevor Milton, Nikola founder, good to see you. And good luck on the road ahead. We're looking forward to staying in touch. I think you're doing some very important stuff.

TREVOR MILTON: Thanks. Big day today-- couldn't be more excited. First day being traded on the NASDAQ, NKLA, so wonderful. Thanks so much.