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SPEAKER_01: Hey, everybody. Hey, everybody. Welcome to This Week in Startups. And I'm really excited about today's episode because it brings together a lot of the topics we've been talking about on this very podcast for the last decade. As we all know, private companies have been staying private for a long time. And my friend Bill Gurley was saying, hey, maybe companies are staying private too long. Airbnb may have missed their window going public. And then you had Uber, which took 10 years. Ultimately, maybe worth it. Or maybe there's some criticism that the retail investors didn't have a big enough lift. Then you have my other bestie, Chamath, doing SPACs for Virgin Galactic. And SPACs becoming very popular. Special purpose vehicles acquisition companies and reverse mergers. Then retail investors getting involved in the stock market again. We never thought we'd see that. I invested in a little company that wanted to make stocks freely tradable with no commissions called Robinhood. And now that company's got over 10 million users and retail investors have gotten involved in the market. Now, layer on top of that, the battle for getting off of carbon. Perhaps the most important battle of our lifetime. The biggest existential crisis, if you ask anybody, is global warming. Or maybe China and communism taking over the planet. It's kind of a toss-up for me. These are things that we certainly should worry about. The phenomenal success of Tesla. The founder of Niccolo Motors is with us today. They are a company that was private for about five years, I believe. And they went public through a SPAC. And they have a massive number of retail investors who are speculating on the company. As one does when they buy a company pre-launch. This is a company that has not launched their products yet. So, of course, they've gotten that criticism. Should a company go public? If the product is not out yet, the last time we saw that was the dot-com boom, right? And I've got some scar tissue from that. So, welcome to the program, Trevor Milton. Now, you're the founder and executive chair, correct, of Niccolo? And you had your friend and colleague take over the president and CEO slot, correct? Yep. Well, thanks for having me. So, you heard my little preamble. You've had a heck of a ride. And so, there's many different places to start with the story of Niccolo. But, you know, I'd like to start with what is the product that you are trying to create in the world or products? And why is that important to you?

SPEAKER_08: Yeah. I mean, it has been a pretty crazy, incredible ride getting here. We were private for, you know, for a few years.

SPEAKER_10: And a lot of people ask, you know, why did you go public? Well, mainly it was because of WeWork. Once WeWork came around, they kind of, there was a big glass house. The cracks started coming. The whole thing fell down overnight. And, you know, they wanted to see our entire business model. When investors, prior to WeWork, investors would come in and invest a lot of money. And it was, you just should sell them on the vision. They'd hire McKinsey to analyze your business. And they'd get the sign off and they'd make the investment. Once WeWork came along, ultimately, the next question was, what makes you not the next WeWork? So, the discussion totally changed and it became a problem. So, we wanted to, we wanted to show everyone. We knew when you go public, you show them everything. They get to see your books, the money, every contract, every related party transaction. They get to see everything. And ultimately, what that did is it brought a lot of confidence to the investors around Nikola. So, what is Nikola? We are a zero emission, original equipment manufacturer, building very big zero emission semi trucks. But I would tell everyone, we're not really just a truck builder. We're actually a technology infrastructure play. And then, why is that? It's because we don't make money necessarily on the trucks. We make money on the infrastructure, the hydrogen. So, if you think about a diesel truck, when you buy a diesel right now, say a brand new Peterbilt, you know, big semi truck. You're going to pay $150,000 for the diesel truck. And then, you'll pay about a million dollars-ish for the fuel for that truck.

SPEAKER_12: So, the big problem with that is, is the oil companies make all the money. So, we came in. We said, look, we want to take all that money from the oil companies, bring it into Nikola. And when you buy our truck, we cover the cost of your truck, your service, your warranty, your maintenance, and your hydrogen. Hydrogen fuel costs. And so, now, someone just pays us per mile to drive it. That's it. They never have to worry about any other variable. And we've been incredibly successful. Over $10 billion in pre-order reservations. An $800 million order with Anheuser-Busch. 13 routes coming for their distribution centers. We're using our trucks and our business model. And, you know, we've had a wild ride. I mean, we own public. And, you know, it's been a wild ride. It's very difficult being public.

SPEAKER_13: I'll be honest. It's very difficult. But we've got a lot of great things ahead of us. And that's always fun to see.

SPEAKER_15: Yeah. And so, this is what makes it a challenging, I think, interview is because there's so much to talk about here.

SPEAKER_01: Just pausing for one second on something you said in terms of your inspiration. WeWork was instructive to you because they had closed opaque books for such a long time that their problems festered until the point that they became existential and killed the company, essentially. And your position is, hey, if that company had been public earlier, all of that sunlight would have come in and disinfected everything, and they would not have been involved in such crazy shenanigans. Correct? Am I summing that up?

SPEAKER_17: You could not have summed that up better.

SPEAKER_10: Honestly, they had so much control over there that it was unhealthy. And so, people even ask me, they say, hey, why are you not the CEO anymore? Why are you the executive chairman, and why are you, you know, you're the founder? And it's for that exact reason, so that I didn't want that much control. It's unhealthy for an organization to have a dictator. And so, I'm the executive chairman. The CEO reports to me. But there is a very qualified, great friend of mine, his name is Mark Russell. He was the president of a publicly traded company called Worthington Industries. And he's our CEO now.

SPEAKER_12: And so, what that does, it allows you to have more than one voice in the boardroom, allows you to have more than one opinion. You're not drinking your own Kool-Aid.

SPEAKER_22: Now, that's interesting as a debate. It's interesting as a debate point, I think.

SPEAKER_01: The other side of the argument, and I'm not taking this side of the argument, but just to present both sides, the dictator, in the case of Google, Facebook, Amazon, have created the largest companies in the world, and they have control over their companies. So, on one side, we have the WeWork example being super instructive. The dictator, God King, on that side, destroyed the company. And then on other ones, we've seen the largest companies be built. So, in fairness, the sample set shows both possibilities, correct?

SPEAKER_25: It does, but here's the difference.

SPEAKER_18: So, in the WeWork example, they had full control over everything, the board and the dictatorship and the direction of the company. If you look at these other ones, like Google or Facebook or other ones, you have someone who has a lot of power, which would be similar to me, where I control the board.

SPEAKER_10: So, I can make whatever I want to get through, I can get through if I really want to. But the difference is, is you have an objective board that helps balance. And so, there was never that. And the public didn't know this. So, like you said, what happened is you had all these years of crazy things going on. And then when they start to go public, everything comes out in one shot. And it's like, oh my gosh, this is a problem. But if they would have been publicly traded, they would have been more methodical about it. A prime example is inter-party related transactions. Everything I do, I have to make sure that the board understands what it is, why it is. Is it connected? Make sure it doesn't have a conflict of interest. And so, when you run your own private company, you don't give a crap about that. You just, what do you want to do?

SPEAKER_29: You should, because it becomes fatal. I mean, I think probably the self-dealing was the thing that did in, I think, WeWork and a lot of investors' mind when he tried to say, I own the copyright and I'm going to sell the copyright because, surprise, he never actually bought the copyright from me. And I want $6 million for that. And I'm going to buy buildings and lease them back. All that shenanigans was definitely overplaying his hand. And so, to summarize your point, maybe it's good to have some level of control, you know,

SPEAKER_31: maybe dictatorship control, but with some sunlight is maybe the ultimate model.

SPEAKER_18: Yeah, that's how it was with, like, Facebook. I mean, look, Mark controls Facebook, but he has a really good, brilliant team around him

SPEAKER_10: that balances him. And there was never that over there. And that's what I've done here in Equals. We built this team, this really good balance around me of people that are objective. They'll tell me no. They'll tell me yes. They'll tell me whatever I need to hear, whatever's honest. They'll tell me. And they're a great balance to me. And we've created this company now that is, you know, it's over $10 billion today. By the year's end, in my opinion, I can't tell anyone where it's going to go, but I believe it'll be three to four to five times that. And that's the great thing about being public is as soon as you start executing your vision, it just starts going crazy. And that's where we're at. So we let the retail investors come in. You hit on this point earlier. Most people wait till it's too late for retail investors to ever get involved. We allowed retail investors to come in and they get to ride the ride with us. Now it's very volatile, but they get to ride the ride with us. And that's the advantage. It's not just big, big humongous funds that are buying all your stock and they get all the upside. The regular person gets to be part of the Nikola story now. And that's a, that's a brand new model that no one's ever really done before until now.

SPEAKER_22: Yeah. I mean, the retail investors getting involved early, they're all looking for something that

SPEAKER_36: has perhaps the ability to grow like a private company investment in the venture capital world where I live. Everybody would love to get in on those private companies, but those founders say, hey, being public is too difficult. I would like to stay private. I'll just take a big check from a venture capitalist and I'll just grind on it. You're saying, hey, I want to be, um, I want to put myself up to the scrutiny of being public. What has been the hardest part about being public and having a bunch of retail investors, you know, essentially either being long-term investors or day traders, essentially gamblers on your stock?

SPEAKER_01: What's been the most difficult part for you?

SPEAKER_08: I'm trying, you know, the hard part is my generation and the generation that came after

SPEAKER_18: me is very, very, uh, focused on immediate gratification. They don't know what 30 days means. They don't even know what 60 days means. They know what three days means. And they live their life based upon a very short window span of instant gratification. So what I'm struggling to figure out how to do it, I'm working on it every day is help

SPEAKER_10: these investors essentially realize that do not invest in Nikola unless you're willing to hold it for say six months. Don't even do it because you, you got to allow a company time to execute their vision or they're going to make bad decisions. And it's not about the, you got it like Warren Buffett talks about, look, don't even, don't invest in company unless you put it in and don't look at it for years. And the problem is, is that you want the blend. You want the, you want the Robin Hoods, but you also have to educate them to become more like Warren Buffett or others. No, he's not the, he's had some bad runs lately, but still, no matter what, he's brilliant. So you want to, that's the hardest part I have is helping, um, my generation realize

SPEAKER_11: that instant gratification is not healthy.

SPEAKER_36: Yeah. It's, it's great that people are dabbling in the market and getting educated.

SPEAKER_01: Uh, but eventually what they'll learn is if some, if some company's a winner, you want to hodl it, right? Like the Bitcoin people, the one thing they got right is to never sell, right? If you think that this is the future, then why on earth would you get off the train? I think Tesla shareholders, Google shareholders, Amazon shareholders certainly have learned that lesson. We get back from this quick break. I want to break down this innovation in business model because what we've been told is hydrogen doesn't work. It's too expensive. And here you are doing this radical new business plan to sell transportation by the mile, as opposed to sell the car and then sell the fuel. You're just selling a flat rate. I want to understand how you came to that as the best model. And then what is the actual economics and why you're pursuing hydrogen and not electric as your primary vehicle for your primary vehicles.

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SPEAKER_22: All right, everybody. Welcome back to this week in startups. Really excited to have a very fascinating cat, Trevor Milton, on the podcast.

SPEAKER_52: He is the founder and executive chairman of Nicola Motors, which you've been reading about incessantly because stonks only go up. Obviously, we're in a bit of a tech stock mania in the summer of 2020. Cost, some people believe by, my beloved Robinhood, which I've been lucky to be an angel investor in, one of the top three positions I've been able to get in on along with Uber and com.com. And a bunch of retail investors who can't bet on sports, it seems, are getting into speculating on stocks. The downside, of course, you can lose money, but you're going to lose that money if you're betting in Vegas or on football teams, obviously. So maybe getting a financial education is something miraculous for this generation. And that could be a silver lining coming out of the pandemic is that we have a financial literacy in this next generation. Trevor, of course, has been dealing with that because the stock price has been on a bit of a roller coaster as people discover the company. And then turn over cards. And we hope to turn over some cards here and understand Trevor's actual mission, understand

SPEAKER_49: the insights, and understand the executive, which is critical. So let's dig in on some basic things. Why are you pursuing hydrogen and not batteries? Because it seems like batteries are in every laptop, every phone, and the advances in batteries have been pretty spectacular. I own the 16th Roadster ever made. I've been a fan of Tesla since the beginning. I've owned every one of their cars. And the battery life on those has been spectacular. And the prices have gotten cheaper and cheaper.

SPEAKER_58: Why would you jump off the battery train and go on hydrogen? I don't understand.

SPEAKER_10: Yeah. So actually, what people don't know is Nikola is the only group in the world that offers both battery and hydrogen. So we do build these big semi-trucks, and they're either hydrogen or battery electric. And they're two different markets. So a lot of people think that battery competes with hydrogen. It doesn't. They're completely different markets. I'll explain this. Battery works really good up to about 300 miles because you don't need as much weight on batteries for the range. So you can get that vehicle to do what you need it to do, and it'll go up to about 300 miles. Over 300 miles, hydrogen makes much more sense because of weight. The weight is everything in trucking. So every pound of batteries you have on your vehicle, you're losing about 50 cents per load per pound, up to. So if you have a truck that weighs 10,000 pounds more like a battery does compared to hydrogen, then you're going to lose up to $5,000 on every load you do every day if you're

SPEAKER_61: at full gross weight. Wait, why is that?

SPEAKER_36: I don't understand that. Is that because the weight of the batteries degrades the energy usage or because I'm getting charged to buy weight or there's a cap on how much weight a truck can have?

SPEAKER_29: Explain that to me. I don't understand. Exactly.

SPEAKER_64: So trucks have a cap on weight, 80,000 pounds.

SPEAKER_10: So if your truck weighs, let's say 20,000 pounds, that means you have 60,000 pounds in essentially freight you can move with the trailer, right? Got it. So, but if your truck weighs 30,000 pounds, then you only got, you know, you got 50,000. So you lost 10,000 pounds of cargo you can move. Well, that 10,000 pounds of cargo, a lot of times gets charged. If you're talking about like pork or whatever else or heavier or drinks, you can get charged 50 cents a pound. So it's a huge problem.

SPEAKER_67: Because you're losing 50 cents a pound, essentially.

SPEAKER_10: Yeah, you're losing, you're losing, you're losing money and revenue on every load. So hydrogen does not make sense in every situation. It's only a very narrow window. And that narrow window happens to be a trillion dollar industry. That's, that is weight sensitive loads, long range, what we call over the road freight. So that's moving stuff from state to state.

SPEAKER_36: Weight sensitive would be the trucks are being filled to the brim, as opposed to like maybe a FedEx truck may not be filled to the brim. It's filled with whatever's got to be there tomorrow. So it might only be built filled 50%, or if you're transporting cars, maybe they only take up 50% of the volume, but something that could fill a complete volume would be beer

SPEAKER_29: or food or milk or something, correct? Exactly.

SPEAKER_10: Or there's two things that they call it in trucking, weight out and freight out. Okay. So freight out means you could have like toilet paper in there and you have no more room and it doesn't matter because you're, you're, you're 30 pounds lighter than, than capacity anyways, or 30,000 pounds and no one cares. Battery makes a lot of sense for that. But when you start putting heavy loads, like drinks, like Anheuser-Busch or beer or food or, or milk or anything else, weight becomes a major problem. And that's where hydrogen makes a lot of sense. Now here's the key to hydrogen. Hydrogen up until like two years ago, until Nikola came along to, we really changed the whole thing. Hydrogen would have never worked. It was too expensive.

SPEAKER_73: We started at $16 a kilogram, which is like five times more than you would with, with our three, whatever, three to five times.

SPEAKER_29: How far does a kilogram drive a truck?

SPEAKER_74: Eight miles.

SPEAKER_29: And what would that drive like a normal car? Like five times that or 10 times that? No, a normal car, a kilogram will give you like 40 miles. Got it.

SPEAKER_80: So a kilogram, $16, eight miles is $2 a mile. Yeah. Crazy.

SPEAKER_68: You're on bankrupt.

SPEAKER_80: Yeah.

SPEAKER_68: So now, now what we did is we've been able to drive hydrogen down to under $4 a kilogram.

SPEAKER_11: We're about $3 a kilogram on hydrogen now. So all of a sudden those economics now make sense. You're cheaper than diesel. You know, you're down below that 30 cent per mile mark on, on fuel.

SPEAKER_83: So now it makes total sense to, to drive hydrogen and hydrogen is zero emission. How did you do that?

SPEAKER_15: How did you get from 14 to three? Is there some special sauce there?

SPEAKER_10: Yeah, very simple. It's all about, it's about standardization. So it's like a phone, right? When Apple makes a phone, they'll make 25 million or a hundred million of the same thing. Yeah. So, uh, in America right now, there's no two hydrogen stations that were actually developed on the same platform. They're all, they're all engineered from the ground up separately. So it's like your cost is outrageous and they have to, but there's no standardization. So we, we developed the first ever standard hydrogen station that can be produced in the thousands. And that's the key is you just drive the cost down.

SPEAKER_92: So that takes, if you make a thousand of these instead of it costing 50 million, I heard to make a hydrogen station. Is that about right, right now?

SPEAKER_10: A big one. Yeah. So a big, a huge station for semi trucks, it would be 50. Now we've got it down below 15.

SPEAKER_92: So this is the equivalent in the Tesla operating system or the Tesla world of the supercharger network, correct?

SPEAKER_18: Yeah. Very similar to that. Um, but we don't ever build on speculation. So Tesla goes out and puts these chargers all over the place for everybody.

SPEAKER_10: We don't. So Nikola, what we do is we sell the customers that go to point A to point B every single day and they, they go back and forth. Like a standard route.

SPEAKER_27: So that's what the, the Anheuser-Busch, uh, deal is.

SPEAKER_10: Exactly. So you put a station on that one route and you never have to worry about if there's trucks to fill there, they're going to fill 24 seven on that route every single day.

SPEAKER_97: And that's where all the money is.

SPEAKER_22: And so that $800 million deal, how is that stage? They, they, they pay, have they paid you any of that? It's a letter of intent. I'm just curious the, the nature of that. Why are they, it's in contract or.

SPEAKER_18: It's in contract, but we have to, so what we have to do is they pay per mile. So we allow them to run our trucks.

SPEAKER_10: We cover all the hydrogen costs. We cover everything. And they pay about a dollar a mile. And that's how we make our money. And so here's, here's the way it works. When Peter built sells a truck, they're going to make $15,000 in profit on that truck. When Nikola sells a truck, we can make almost a quarter million of profit per truck. That means they have to sell 20 times. So around there, we make 20 times more money per truck. We sell them Peter built us, other than our competition. And that's because we own the hydrogen. We own the oil, but it's not real oil.

SPEAKER_104: It's zero emission fuel. And that's the key to hydrogen is, is you own the network.

SPEAKER_36: And hydrogen, the tank's empty and you don't have the weight.

SPEAKER_93: So that's the reason why you have this big advantage on the volume, the sort of max load routes.

SPEAKER_10: Well, even like, even our, even our hydrogen, if you have 60 kilograms, that's only like 120 pounds. You know, it's like very light. It's like 60 kilograms is more energy than, than essentially having 15,000 pounds in batteries with Tesla. So that's how, I mean, you're talking 120 pounds compared to 15,000 pounds or 10,000 pounds.

SPEAKER_109: Why has hydrogen not taken off in the United States then? I'm curious. It's too expensive. It's just too expensive.

SPEAKER_64: Yeah, but we've driven that down now. So now you see the whole world's talking about hydrogen now because of Nikola.

SPEAKER_10: Like three years ago, you couldn't even talk about hydrogen. Now it's the talk of everything around the world. Europe's spending hundreds of billions on it. Everyone is now.

SPEAKER_111: So the rest of the world tried to figure out hydrogen, power cars, and trucks.

SPEAKER_36: They couldn't figure it out. And then you guys came along and you figured it out.

SPEAKER_114: Exactly. Because cars are a terrible idea. A lot of times with hydrogen, they picked the wrong market.

SPEAKER_18: These guys are, I mean, it's insane.

SPEAKER_10: Stupidity. They went after the, like cars, people want a $30,000 car. They don't want a $100,000 cheap car. They want to, you know, when I say cheap, that means like, it doesn't give you that. It's not like you're buying a G-Wagon. You're buying a tiny little car and you're spending $100,000. It'll never work. The reason why hydrogen works on big trucks is because you make revenue with it and you can pay it back. And you can, it's all about weight. And it's all about range. And you get range and weight with hydrogen and you don't get that with batteries. So in cars, battery's awesome, man. This is the thing. We're honest with people because we sell both battery and hydrogen. So we're very honest with people about what the advantages are. And when you get into cars and light duty, battery's the best thing. You get into heavy duty, hydrogen's the best thing. So they picked the wrong market to go after. It's stupid.

SPEAKER_15: It makes sense. And so also you guys are making, when you do the routes, you're pre-selling the routes.

SPEAKER_36: So you don't have to incur the cost of building this route. Let's say it was from Arizona to Texas or something. I'm just making something up here.

SPEAKER_92: But you're based in Arizona. So betting now would say the, if you do get this Anheuser-Busch thing up and running,

SPEAKER_93: would be in that Southwest category. Am I correct? Or that region?

SPEAKER_18: There's two or three routes they have in this Western area. We're definitely going to focus on those for sure right away.

SPEAKER_36: And so those repeated routes de-risk you because you don't have to take on the CapEx.

SPEAKER_01: Structure without a customer. So previously, the people making the hydrogen cells, trucks, and making the stations were all different people.

SPEAKER_121: Nobody had the ability to build it. And then people would come and then people would actually. Exactly.

SPEAKER_08: Well, this is a difference of us and everyone else.

SPEAKER_10: So think about a company called Clean Energy. They used to build natural gas stations. They spent hundreds of millions all over the country. Actually, billions, I think. And no one ever came to fill out them. And so they just built these things hoping people would come. Nikola is totally different. We only build the order. That means we pre-sell a route. We put a station on it. And we make hundreds of, you know, we make either tens of millions or hundreds of millions of dollars on that route over time. So we just keep building on it. Every single route we do, we can make a quarter million dollars a truck. And the margins are huge compared to our competition. And that's why there's so much excitement about Nikola because we've done a couple things. One, we made the second dirtiest industry in the world go zero emission. We create 10 to 20 times more revenue per truck than our competition. Our margins are gigantic. And we have over $10 billion in pre-order reservations like customers signed ready for us to deliver them trucks.

SPEAKER_36: Letters of intent, right? These are people who want to have. And why do those truck, why do those shippers want to switch off diesel? Is it because of they have goals in terms of greenhouse gases or is it they see this as

SPEAKER_128: the future and they want to invest in it or is it cost?

SPEAKER_119: No, real quick, I want to correct something. They're not letter and tens. They're actually contracts. Contracts, got it. Yeah, billions and billions of dollars with the contracts.

SPEAKER_10: So I want to be clear about that because a lot of people thought that it's just like a non-committal thing. It's not. These are like signed on the dotted line, billions and billions and billions and billions of dollars in orders. Now, we have to deliver and they can get out if we don't deliver, but that's how it is with

SPEAKER_64: any contract you do in life. Like, you know, if they even order a Peterbilt, they can still back out if Peterbilt doesn't give them a truck.

SPEAKER_29: And those folks who are buying those would not go through the time to sign them if they did not have the intent.

SPEAKER_10: Exactly. I mean, these are big companies. They want to be, they're actually planning right now. Like we have calls with Anheuser-Busch on a monthly basis where we're talking about, okay, when's the delivery? What days are these trucks coming in? When's the hydrogen station going in? When's the permit going in? Because they actually have to phase out their diesels. This is like real serious stuff. It's not a joke. And if you miss it, it's tens or hundreds of millions of damages.

SPEAKER_36: Oh, they have to phase it out for environmental reasons that vary by state in the United States, correct? Yeah.

SPEAKER_10: Well, it's because of lease cycles. So they have like a three-year lease cycle on a truck or whatever, and they have to phase out those diesels when ours come in. So if they miss that, that window has to be within like one or two months of each other. And if you're off, you're going to get sued. It's a very complex thing. It's not simple just to go switch out, you know, switch out from one truck to a whole brand new one. It's a complicated mess.

SPEAKER_36: All right. When we come back, I want to understand how you're going to compete with Tesla if they're building a self-driving truck that's battery powered. And if that is coming up in the conversations, when you talk to your customers, if they're saying, what about what Tesla's building when we get back on This Week in Startups?

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SPEAKER_137: Let's get back to this amazing program.

SPEAKER_52: Okay, Trevor Milton's on the podcast, being super honest and upfront about his company,

SPEAKER_36: Nikola Motors, which is building a semi-competitor to diesel trucks, and of course, the semi that Tesla is building to make clean air, which is great for the world, and to get rid of emissions. They are betting both hydrogen and batteries, but your company is relatively small, given the, I think, $10 billion plus valuation, and I know the valuation was maybe three times that at the peak, so you were worth $30 billion just before even having the products on the road, which is, I think, where the criticism comes from. But when hearing the vision, it starts to sound a little more reasonable, perhaps not at $30 billion, but at $10 billion, maybe it sounds more reasonable as a bet. When will you know if you've made the right decision to go hydrogen versus battery on the long haul? And is there a chance that you might switch it?

SPEAKER_10: No, because we actually build both right now. So we build, we actually have the first ever battery electric truck coming to market beating Tesla. So we have a 720 kilowatt hour battery truck coming to market at the middle to end of next year in full production with the validated chassis. They may beat us with like one or two trucks, but we have full production coming out at that point where you can spit out thousands of these things.

SPEAKER_36: And the reason you're able to beat them is because you don't, you've taken the OEM partnership route, you're not actually building the trucks yourself, you're doing it with a partner who's

SPEAKER_93: built trucks already.

SPEAKER_10: Exactly. I've actually been asked in the past, you know, that I've said, I've had people ask me, you know, wait, if you could have given Elon, you know, two bits of advice, I think the dude's pretty smart in a lot of areas.

SPEAKER_144: You think?

SPEAKER_145: He's really smart in a lot of areas. So you give that to Elon, you can see that he's smart? Yeah. In some areas.

SPEAKER_12: Yeah, he's in some areas, he's ballsy, you know, he's got a lot of guts and he's willing

SPEAKER_10: to put his money where his mouth is. And so I get him, I get it. Here's the thing. There's, there's two things I think that he should have done. He should have worked with dealerships. First of all, to, to service his vehicles, maybe not sell them, but service them. And then the second one is, is that, you know, if you think about, if you think about

SPEAKER_152: OEMs.

SPEAKER_10: Yeah. I was going to get back to the service though. But if you think about the, the man you found is going to cover something in the service, but don't worry about it. The OEMs building these vehicles is a nightmare. He had a great relationship with Daimler and Daimler could have come in and helped him. solve all of his manufacturing problems with, with vehicles. And it would have been a walk in the park and he would have been building twice as many cars as he is today. And now it would have required him to give up some of the company, but who cares? So what we did is we said, you know what, we don't want to do our, you know, we think it's not smart to do our own service. And we don't think it's smart to actually own the flight or to build the trucks ourselves. We want a partner to help us. So we went and we partnered with Iveco. They're the fifth largest truck OEM in the world. They have 50 years, five decades of, of heavy duty trucking experience in cold weather, Arctic weather, heavy duty roads. And all over Europe, they are, they, they're just huge. And so they came in and they said, look, Trevor, we have one of the best trucks in the world, but where we have no technology. And we said, well, that's good. Cause we have the best powertrain technology in the world. We think, but we have no, we have no expertise in the truck chassis world. And, um, so we partnered up with Iveco and they, they helped us with, uh, they spent four years and billions of dollars building a brand new truck platform. And in Europe, all the trucks are the same.

SPEAKER_11: So a battery electric trucks identical to a diesel truck in Europe. It's they, they have to be because of, of, because of length restrictions and everything. So we partnered up with them and now we have the first ever zero emission truck coming to market.

SPEAKER_10: It's got 720 kilowatt hours of battery. And it's, it goes over 300 miles. And so we know battery as good or better than anyone in the world. And we're even beating Tesla to the market with our semi truck. That's why he just recently, and why Elon went out and told his team to full focus on the semi truck because we're beating them to the market. So on the freeway or within the city's battery kicks hydrogens, but within the city, a lot of times, almost every time. But as soon as you get on the freeway, that's where hydrogen, that's where hydrogen makes sense. So we do both of them.

SPEAKER_36: Uh, and you're going to do when people are signing these deals with you, are they saying, Hey, how do you, how do you compete with Tesla? Is Tesla going to just sell the trucks to them? Do you think, or think Tesla will do this, you know, we'll just charge you by mile approach. Cause that seems like a pretty clever business approach. I'll give you, they're going to change.

SPEAKER_10: They're going to, they're going to change to exactly what we did. So, um, look, I've given a lot of credit to them, but they're going to give it a lot of credit to us too. We're the ones that pioneered the entire cost per mile with a semi truck and they're going to pivot. And then we've already heard it now. So Tesla started to tell people they're going to start selling energy at a fixed rate for them for their battery electric trucks. So how do we compete? Well, we don't compete hydrogen versus battery. We compete battery versus battery. So our battery electric truck will compete with the Tesla truck. And they're going to, and the best part is this market's so big that both Tesla and Nikola could build trucks for the next 20 years and never even really compete with the same customers. That's how big this market is.

SPEAKER_36: But you've got a relatively small company, about 400 employees. Um, so you're not doing the manufacturing.

SPEAKER_15: You've outsourced that. Um, so what do the 400 people at Nikola do? What is the speciality that you are focusing on?

SPEAKER_10: Yeah, I love this podcast, by the way, because you get into like really good questions that a lot of people don't get to the 400, the 400 people here are focused on spent, like we call them specialty engineers. They're, they're all about the advanced, um, technologies of the company, whether it's software, hardware, inverters, e-axles, um, batteries, battery management systems, controls, all that stuff. Right. So what we do is we take that once we fit, once we build a prototype, then we send it out to someone like, um, and in e-axle, you can do someone like, uh, you know, Borg Warner ZF or whatever ZF, they call it ZF. And they're the experts. They have, you know, 30, 40,000 employees on board. Why would you want to do what they do? So Tesla does everything themselves. I don't, I'm not saying they're right and I'm wrong, or I'm not saying I'm right. And they're wrong.

SPEAKER_36: The going full stack for Tesla gives them the ability to build these dreadnought factories around the world. And if they can continue to sell cars at this pace, it could become like, uh, like a literal factory where they're dependent on no one. I think with the OEM, you have so many people who can screw up and then delay the production of what you're doing. You lose control, which is what Tesla had actually in the Roadster days. I think that almost killed the company before Elon was running it. The Tesla Roadster was built with OEMs and there is some challenge to that too, right? You are dependent on each piece of the puzzle coming together with those OEMs. And if any one of them screws up, you've got to then, you have a delay, right? You're, you lose control.

SPEAKER_119: It is true, but there's been hundreds of millions of cars built on that platform and they've all, all these OEMs have figured out how to manage their supply chains.

SPEAKER_10: It's not that hard to do. You have to, now a lot of it comes down to financing, how much, you know, just in time versus, you know, stored inventory. Most of these guys are too greedy to ever have stored inventory. So they're, if they have a three-day delay, it affects their entire supply chain. I'm not like that. I'd rather have a big inventory of our parts and just, and for stability, but it, hundreds of millions of cars have been built by third-party suppliers with, with these different parts. Remember the tech is ours. So the battery, like all the important stuff, like software batteries or, or e-axle designs, it just means we use someone else to, to build them in the thousands for us, but we own all the tech. Yeah.

SPEAKER_153: And that's, that to us is, allows us to not have to have 50,000 employees.

SPEAKER_52: Right. And then let's talk about self-driving. That's obviously coming and it's going to be coming in the midterm.

SPEAKER_92: I think trucks and truck routes are the most repetitive and the easiest to get right. And that's clearly why so many people are focused on it. You're taking this OEM approach. You're going to have to have self-driving in the trucks at some point. So is it going to be a similar thing where you pick cruise or you pick Waymo and you just

SPEAKER_36: say, Hey, can we license your technology, which is what Waymo wants to do anyway?

SPEAKER_32: Absolutely. I mean, look, here's the thing. Like Nikola took a different model than Tesla.

SPEAKER_10: Tesla does everything in house and they're good for it, but they're also bad for it. You've got thousands of people. Like for instance, Daimler and Bosch have got thousands of people on autonomy right now. You have crews that have, you know, they have hundreds of people. You have too simple. You have Waymo. You've got, they've got thousands of people spread throughout this, you know, to hire these people is almost impossible, let alone teams of thousands of them. And the cost is outrageous and it's becoming a commodity. So I kind of, what I tell everyone is don't insource anything that's a commodity. So if it's a commodity, don't do it. Just, just bring it in from a supplier. It's like glass on a window. Why, why do your own glass? That's insane. Just buy someone's glass.

SPEAKER_36: I mean, I guess the, the, the, the argument Tesla had was because they built the entire thing, they're dependent on nobody. They put raw materials into one side and they capture all that profit and then they could scale faster. That would be the argument. But in your case with trucks, it's not like you're trying to produce five or 10 million of these a year. There you go. You expect to produce five or 10,000 a year. You nailed it.

SPEAKER_181: It's all about quantity. And that's the problem with trucking. You don't have the quantity you have an automotive in.

SPEAKER_11: That's why I tell people what we do is not, doesn't mean that Tesla's wrong. It just means that it's a different industry. So it's, it's just a totally different world.

SPEAKER_52: And, and now did you pick the name Nikola five years ago because Tesla existed and you

SPEAKER_49: thought that would be like interesting? How'd you come to the brand name? Because I think people are like, well, that's kind of close to Tesla.

SPEAKER_186: How did you come to the name, the name of the company when there was another company with the last name of the inventor?

SPEAKER_188: Yeah, I didn't name it after because that would be a very prick move to do. That's why I'm kind of, you said it, not me. I'm kind of asking for that reason.

SPEAKER_104: Because it felt a little bit trolly to.

SPEAKER_18: It would be a prick move if it was, it had nothing to do with that. It had everything to do with the fact that Nikola Tesla was the greatest inventor in the world.

SPEAKER_10: I'm a true inventor. I'm a creator. I started five companies in my life. I've been doing this for 20, you know, over 20 years. I know what it's like to create. I know what it's like to innovate. And the greatest creator of electricity and technologies around that have been Nikola Tesla. So this was paying homage to him. Had nothing to do with Elon. And the biggest problem that I have is, you know, the guys over there that got upset at

SPEAKER_12: us for doing that. It's all a pride thing. It has nothing to do with it. Like, no one, this is everything.

SPEAKER_36: I mean, I guess the argument would be you're kind of drafting on their branding. What do we get out of it? There's nothing we get out of it other than criticism. It creates a category. Every journalist has to say, oh, Nikola and Tesla, Nikola Tesla get it. Like, it basically puts you in the category, you know, or stands you next to them, right?

SPEAKER_166: It's kind of like a photo bomb, I guess, is a cynical way to describe it.

SPEAKER_32: I guess there's probably some good that can come from it, but there's also been a lot of bad.

SPEAKER_10: And so I've always told people, look, when I have a belief in something, which is I think that Nikola Tesla was one of the greatest inventors in the world, I'm going to name my company after him. I own the trademarks on it. So I'm going to do it regardless of what someone else thinks, because I'm a guy at principle. Now, if someone else doesn't like it, I don't, it doesn't really matter to me. But just to answer your question, it had nothing to do with Tesla itself. I mean, look, I've had Tesla cars for the last, I think, over five years now, and I finally just got rid of it. I finally went to a Jaguar I-Pace to try it out.

SPEAKER_11: And it's the first time in five years.

SPEAKER_202: How much better is the Tesla than the Jaguar?

SPEAKER_11: Software-wise, Tesla destroys Jaguar. Quality-wise, Jaguar destroys Tesla.

SPEAKER_10: But it's, but that's, that's the problem is I like software more than the quality of the material. So it's kind of a problem because I prefer the Tesla car because of the software and how easy it is to use. But I, and I despise Jaguar with their software. It's, it's a monstrosity of problems and nothing works. But so I, I love what Tesla has been doing around the world because they, they've literally pushed OEMs to learn how to be, to think just to be normal. Like, I'll give you a quick example. If you want to start your car with a Jaguar, it takes like, I swear, it takes like 15 minutes to do it. You have to log in. You have to like revalidate. You have to tell the car to do something.

SPEAKER_12: You have to wait. It has to think about it. It has to re-find where the car is. It's like 15 minutes to turn your AC on. Sometimes you can't even do it if a window's open. Right. Why does it, why, why do you care if a window's open? Let me start my damn car. Yeah. You know, and it's like this total mess, right? And you get on Tesla, it's like one click of a button, you're in the app. Another click of the button, you set the temperature. Another click of the button, close the app.

SPEAKER_68: It's like three, easy three steps.

SPEAKER_36: And if you have your phone, you can, if your phone is paired, you can just open the door and sit down and the car turns on because it knows you sat down, right?

SPEAKER_126: They've actually thought this through.

SPEAKER_61: I have given so many compliments to, to what they've done in the world that it's, outside, it's definitely incredible what they've done.

SPEAKER_210: And you're going to do some consumer cars as well, correct?

SPEAKER_68: We only won. We have the Nikola Badger, which is, well, I shouldn't say only won. We have the Nikola Badger, which is an electric pickup truck.

SPEAKER_49: I want to know why you decided to add that to your plate, because you have a huge, big plate filled with delivering on these $10 billion in contracts. Why would you then go to consumer when we get back on This Week in Startups?

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SPEAKER_36: Nikola Motors. They are building hydrogen and battery-powered semi-trucks with their partners. They're taking an OEM route. They raised about $500 million before they did their SPAC. The SPAC brought in another $700, $800 million. Is that correct?

SPEAKER_215: Yep, $700, yep. Or $700.

SPEAKER_36: And there were a bunch of warrants associated with that. And so when you buy a warrant, you actually have to buy it. So I believe that the company gets that cash correct as well.

SPEAKER_107: Yeah, we just got another $260 million this week from it.

SPEAKER_36: So that means you have a billion-dollar war chest.

SPEAKER_107: We do.

SPEAKER_219: We have almost a billion dollars in our account right now. Amazing. And no debt.

SPEAKER_36: And only 500 employees, or 400 employees.

SPEAKER_49: So that means you're really only spending on employees $10 million a month or something, I would guess, something in that range?

SPEAKER_220: It's really low. And that's what the advantage is, is that's why we did it that way.

SPEAKER_49: So now you've got all this cash on the balance sheet, and you've got all this runway.

SPEAKER_36: But building a network of hydrogen chargers and coordinating the building of hydrogen trucks and satisfying a bunch of customers seems like an awful lot of work. And then, I'm not sure exactly the date you announced it, what date did you announce that you're going to take on Ford's F-150 pickup truck and Elon Cybertruck and the Rivian? Rivian is the other. Rivian. Rivian. Sorry, Rivian. So now you decide, F it. I'm going to create an F-150, the best-selling car in the United States, I think, and obviously the best-selling truck.

SPEAKER_53: Why would you take on more work?

SPEAKER_181: That's a good question. Yeah. So here's the reason why. Our trucks are a gravy train with money.

SPEAKER_10: That's where all the money comes from, is our big semi-trucks, right? The problem is, is 90% of Americans will never own a semi-truck. And so your portfolio of investors can be very limited. And we wanted to go and build a company that's going to be worth $500 billion, trillion dollars over, say, 10 or 15 years. And if you're limiting yourself to 10% of the market, you'll never do it. No matter how good your numbers are. The reason why people love Apple, everyone touches their product. Why do they love Google? Everyone touches their product. So what I did is I knew day one, once we started coming out, we had all this gravy train coming in from the semi-truck program. My question was, okay, that's great, but I'll never touch the average consumer.

SPEAKER_11: So therefore, 90% of investors will probably never invest in me. So I needed to touch the consumer. And so the truck is for the profit, the semi-truck, the pickup truck is for the consumer.

SPEAKER_10: And the consumer is the one who is part of the Robinhood portfolio, is part of the family office or whatever. And that's where all the valuation of the company comes from.

SPEAKER_36: Are you saying you're going to do it profitably, or that it's a loss lead or it's profitable? You tend to be profitable with it. What will that retail for? Have you announced the pricing and the launch date of that?

SPEAKER_10: Yeah, 60 to 90K. And so very reasonable in the price. And we'll have about somewhere right around about 20% margin on that. And it hits next year.

SPEAKER_228: So we'll be in production at the end of next year.

SPEAKER_36: And are you taking the same approach? You're going to build it with a partner as opposed to... Yes. So who's that partner? Who's going to build a pickup truck?

SPEAKER_64: That's not been announced yet, but it'll be coming out soon. That's probably one of the biggest announcements that the entire investment community wants

SPEAKER_10: to know about Nikola. And that hits very soon. That's a huge deal. And it'll be built at their factories through their supply chain. You're talking about billions of dollars in saving with the ability to build hundreds of thousands of these without any type of growing paints.

SPEAKER_233: And it's going to be hydrogen or is it going to be battery?

SPEAKER_228: Both. You can order it either way. You can choose battery or hydrogen.

SPEAKER_36: But with hydrogen, how would you fill the tank if you have yet to build the network?

SPEAKER_10: Well, in some states, like California, you have hydrogen. You already have a lot of hydrogen stations. But we have 700 hydrogen stations going up right now throughout America. And it's just going to take time. We won't sell hydrogen in every market. We're going to say, look, as soon as our station comes online, then you can buy the hydrogen version there.

SPEAKER_139: Why would somebody buy the hydrogen?

SPEAKER_36: Because it seems, like we said earlier, that battery kicks hydrogen's ass in low load situations. If we take that as a given. It does. Who has a pickup truck that's going to be going for 10 hours hauling something huge? That seems like a tiny part of the market. Even what is that market?

SPEAKER_10: No, about 30% to 40% of the pickup truck market actually uses their truck for work and pulls trailers. So in that situation, you do not want a battery truck. You know, if you pull a trailer with a Tesla Model X right now, you lose about 60, 70% of your range. So you're talking about getting a, you know, you can't put a trailer on there and go more than 100 miles on a, on a cyber truck without a dying or 150. So the idea here is, is that if you can, with hydrogen, you can allow that truck to pull a trailer, you know, it'll give you a 600 mile range without a trailer, about a 300 mile range with it. And so that's, it's made for the construction world, the people pulling trailers, the business owners, the guys going to job sites or those trying to power a job site or those hauling big loads. And that's what it's for on the, uh, the, that's what it was made for, for the hydrogen

SPEAKER_228: version.

SPEAKER_15: And so you will, on the hydrogen side, is there a hydrogen pickup truck out there today? No, we're the first one.

SPEAKER_92: Yeah. So you're not going to be competing with anybody on the hydrogen side for the pickup truck, but you will be competing with, uh, Rivian and the cyber truck eventually, um, on that side, but you're not going to be building it yourself.

David Friedberg: You're going to be putting your innards, your drivetrain, your batteries, et cetera. But I assume you're not making your battery packs either, right? That's your lightweight. You do make our own battery packs. We do make our own battery packs.

SPEAKER_11: That's a key, that's a key element because of the cost, the battery packs, 30% of your vehicle's cost are 40. So it's one of the most important things to actually bring in the house. And so we do make our own battery packs. The whole truck is our design is our, is our build, but another manufacturer is going to actually be spitting it out on their assembly line.

SPEAKER_92: So you're going to be in the battery business. You're going to build battery packs.

SPEAKER_97: Oh yeah. You have to be, you'll never make it as an OEM. If you don't build your own battery, that's the most critical part.

SPEAKER_36: What do you think Tesla's going to announce with this, um, new battery technology? They had bought that battery company. Is it going to be that the life cycles of batteries will get much better? You know, he's down. What do you think it's going to be?

SPEAKER_248: Yeah. I think you're going to be cost material type, you know, uh, things like that.

SPEAKER_10: But I think, uh, you know, he's, you know, it's, it's tough to you. Like I, I get, I get where they come from, but they've, there's a, I, I really hope that

SPEAKER_11: they focus on just getting out what they've promised. Like, you know, full self-driving has been promised for many years. It's still not there. It's been, and there's just a lot of things where they need to focus on delivering and they've, they started to deliver quantity of cars, but they need to start delivering on their, on their, on their, their promises of what they've done. And that's been really my only critique. And another battery thing is like, okay, look, you got Samsung, LG, and Panasonic spending tens of billions of dollars in research and development. Why would you want to try to engineer your own cell? You could just pay Panasonic to do that. Like why, why try to, you don't see.

SPEAKER_36: Well, I think they want, I think the reason they would be. Doing it is because they think they can do it better.

SPEAKER_22: And that if they do 10 different things concurrently, 10, 20% better, they change the world.

SPEAKER_10: They can. The complexity is, is that you can't focus. And I, that's, that's okay. But I mean, you know, look, it's, it's a, it's a tough one for me because as an entrepreneur, the easiest thing to do is be distracted. It's easy to be distracted. It's hard to focus. And I, maybe that's where we differentiate ourselves a little bit is, is we have a lot going

SPEAKER_11: on as well, but heaven, I mean, there's no money in batteries. If you have a buck 75 for a cell right now, okay. The 2170, that's the going rate for billions of cells. They're a buck 75 for this battery, right?

SPEAKER_10: And if you build it yourself, you're going to be a, you might, you might be 10 or 20% cheaper than that, but then you got the CapEx that's going to cost 30%. So it's a net loss of 10% to do it yourself.

SPEAKER_92: Unless you have a thesis that you can continue at a faster pace to lower the price.

SPEAKER_256: And that could make the difference, right?

SPEAKER_123: It is true.

SPEAKER_10: But I mean, you're not getting any, like, that's a whole 10 years down the road. Like, I don't know. It's a hard thing, man. Because like, I, there are certain things I do in house doing cells.

SPEAKER_36: We've, so I would say both of these are valid ways to do it. In fact, Tesla started with the idea of using OEMs and specializing on the software or just in electric, or they just had a small budget back then, but to take on these projects and then use them, because you remember the battery pack in the Tesla is the same one

SPEAKER_92: that goes on the wall in a home and the same one that's used in the power grids in Australia and Hawaii. So, you know, I think that they have a vision to be an energy company overall and just sell

SPEAKER_121: you the Tesla energy pack where you get the car, the solar panels and the wall unit, right? The power. Yeah.

SPEAKER_170: No, they've done some cool stuff, man. I mean, I love what they've, I love what they've done.

SPEAKER_10: I, I just, there's so many things that are like, you know, you only have so many hours in the day, right?

SPEAKER_64: And there's so many things that he could actually do that would be like monumental change rather than like incremental change. I like monumental change. I don't like incremental.

SPEAKER_249: What's the monumental change Tesla's not doing that you think they should do? What's the number one thing?

SPEAKER_08: Oh man. Well, I don't want to give, give some of that away, but I think, I think Elon ought to seriously focus on aviation is my opinion. Really?

SPEAKER_64: One of the biggest polluters in the world.

SPEAKER_11: It's, it's, it's one that needs a lot of battery tech and it's one that has a lot of money involved with it. Cause you're transporting people. I think he needs to come up with VTOLs that are moving containers. I would advise, you know, if he was asking me, you know, Trevor, what do you do? I'd say, listen, we've already ran simulations on it. I already know what it takes to VTOL containers and move them out of ports. That's what I'd probably suggest.

SPEAKER_29: VTOLs of containers at a port. So instead of putting them on trucks, you just actually lift them out. It's going to be.

SPEAKER_10: Lift them out over the mountains, right? Right up to a distribution network that gets moved by a truck after that. So it's like a 15 mile trip. That's it. And you charge when you're done, you go drop that, that container off out of the, out of California. So it picks it up in the port of LA. It moves it up to, to ride outside, right over on the other side of the mountain range. And then a truck takes it from there and it decongests the whole entire value. It gets rid of all the emissions. Or you could do that through Hyperloop.

SPEAKER_109: It is amazing the amount of innovation going on. Because you could also just throw those things into a Hyperloop tube and just zip them out. Do it.

SPEAKER_165: I mean, that's the stuff I love, man. Solve a big problem.

SPEAKER_11: You know, a 5% or 10% incremental change on a battery is a big deal. But they're doing that anyways right now.

SPEAKER_49: I'm curious where you came from and how you got to here.

SPEAKER_92: Because, you know, we got 44 minutes into the podcast. I think we understand the strategy, the product, what you're doing.

SPEAKER_49: I'm curious who you are. Because I haven't heard of you before this. I've been in the business for a while. But I don't know everybody. But I know a lot of people. You had five companies before this. Which one was the most successful objectively in terms of outcome?

SPEAKER_08: Well, outcome, it would have been my previous one, which was D-Hybrid Systems, where we built hydrogen and natural gas storage.

SPEAKER_11: So, I came from the heavy-duty industry already, understanding heavy-duty trucks, storage, how to store energy. That one I sold to Worthington Industries.

SPEAKER_10: But then, you know, I'd say that the most successful one I ever had was actually my biggest failure.

SPEAKER_270: How big did that get, the storage one?

SPEAKER_10: We did a few million in revenue our first year. Second year was $13 million. We're on track for $50 million the year after. And that's when we sold to Worthington Industries.

David Friedberg: And Worthington's also your partner in Rivian, right? I'm sorry, on Nikola. In Nikola, yes.

SPEAKER_97: They had a stake in the company. They actually had a zero basis. And they've made over a billion dollars for my investment.

SPEAKER_128: And so, and then before that, you said you had another company that did even better. Yeah.

SPEAKER_163: So, well, no, actually, my biggest failure was my biggest success, in my opinion.

SPEAKER_10: That's where I differentiate you. It's a company called upillar.com. It was, we did online e-commerce. It was very similar to Amazon. We built the first shopping cart out there that I know.

SPEAKER_11: There might, I don't know of anyone before it, but what that shopping cart did is allow you to buy like 20 items from 20 different people, put it all into a one cart. We would handle the merchant process one time, and then we would split it up under different invoices. We actually, we actually had that before anyone else, before Amazon did.

SPEAKER_10: And then obviously, Amazon grew and it became incredible and they kicked our butt. But we just couldn't handle the growth. We, that was like my biggest learning experiences were at U-Pillar, right? I made a ton of mistakes in my life and it made me who I am today.

SPEAKER_36: What, what did you, um, if you, if you were to look back on that time, top two or three mistakes that you fixed now in your mind?

SPEAKER_10: Um, I tried to scale too quickly. That was a big problem of mine. Like we, I, we were, we were, we were spread out thin.

SPEAKER_11: So we, we were focused in certain markets for, for e-commerce and we were killing it. And then we tried to hit the whole country and it just imploded. So the problem I should, if I would have just stayed focused on the markets that we were at, we would have done well. And we would have had enough people on the site to inside those markets to make it valuable. Um, instead I tried to just go more of the whole country route type of thing. And, and it really hurt us. That was a, the second one is, is that I was in the wrong area. I was in a small town in Utah called St. George and that there's no one there that does investments into the internet at all. And so I was in this town where no one even knew about internet investments. They knew nothing about it. And I was trying to raise money from people that were doing construction. And so it was just a terrible, terrible idea.

SPEAKER_97: I should have been in, if I was in Silicon Valley, I would have probably raised five or $10 billion if I wanted to. Because we're growing, we had 80 million people come on our site. I mean, we're insane gross.

SPEAKER_92: Yeah. I mean, the location did matter for some period of time. Now, locations seems to be mattering less and less these days. People do not perceive that you have to be in Silicon Valley to build a unicorn. Tell me about how the SPAC came along and how you made the decision to do that. Because that seems to be at the sort of key of this story is this bold move to take a company public without the product being in market yet. Certainly the contract, certainly, uh, you know, the team. But to go public, that's the thing you've received the criticism for, but that's the thing that's also put a billion dollars in your bank account and given you the high ground to actually execute on a ambitious plan.

SPEAKER_58: So when did, what is the background on who's the maniac who decided to take this company and say, let's SPAC it? Because that seemed like the bold move of bold moves.

SPEAKER_08: It was a, look, innovators always get criticized until they prove them right. Sure, that's what I'm saying.

SPEAKER_282: I'm framing it as bold, by the way.

SPEAKER_11: Not you, I'm actually giving a compliment here to Tesla, to Elon, because every time he does sign everyone, you know, a lot of times for years, they would call him crazy. And then he proved it and it's like, oh yeah, he's really smart.

SPEAKER_10: But what happens is like a year prior to going public, I told my board, we're going to go public. And they said, not a chance. You're an idiot. And I said, listen, you got to understand. You got to promise. You got to just trust me. We got to go public. We need to. And they said, no, never. And not for like another many, many years. And you got to be revenue. You have to, like, no one ever goes public pre-revenue. And I said, I don't care if anyone ever has, I'm going to. So I, over time I convinced them. And then all of a sudden, when the WeWork thing happened, the board was like kind of woken up like, oh my gosh, yeah, it actually is a problem. We need to think about being more transparent.

SPEAKER_11: How do we do this? How do we raise money in this, in this industry where unicorns are being criticized? So I, I, um, we were dealing with Cowan and Morgan Stanley and they, they brought a person to us. They said, hey, there's this guy who's a former, former head of General Motors.

SPEAKER_10: He's got an enormous amount of background. He's running a SPAC. He's got a, you know, he can help you raise $700 million guaranteed. Um, would you meet with him? And I said, you know, I said, sure. So Steve Gursky, a guy named Steve Gursky came out to visit us and he brought his entire team of due diligence out to see if we were real. And they spent months on due diligence with us and they came to the conclusion that the Nikola truck was real, that everything was real with it, that the supplier's real, the partnerships were real. They did all the due diligence and, and, uh, they had a $235 million SPAC, a special acquisition company. And then they, they were able to bring on another 500 plus million on the pipe investor, which is the follow on investors. So we brought in 700, I think it was a 750 million total, um, going public. And that has been a monumental because now we got to, you know, we have that plus a warrants, which gave us a billion dollars of, of, of cash reserves. And today a billion doesn't sound like a lot, but it's a lot of, it's a ton of money

SPEAKER_36: for a 400 person company. Usually it would have been doled out in $50 million chunks from this point forward, $100 million chunks. And you'd have to tranche it that this billion dollars is going to last you two, three,

SPEAKER_182: four years. Will it take you to profitability or are you going to have to keep going back to the market and sell more shares?

SPEAKER_12: It'll be a couple of years. I mean, it took, uh, you know, most of our competitors are in it over 20 billion to 20, 25 billion.

SPEAKER_10: So it's crazy to think that we can make all that profit without going out again. We are going to go to the market eventually one day to, uh, to bring in more money.

SPEAKER_11: We love to have good cash reserves, but the nice thing about our, I'll tell you a phrase I tell everybody.

SPEAKER_170: And this is one of my favorite phrases. I says, you cannot be environmentally sustainable if you're not financially sustainable. So you, you cannot have a business model that's built on credits only. You cannot have a business model that's built on government subsidies. You've got to have a business model that's incredibly profitable without any type of subsidies. And that's how we built Nikola was a very sustainable financial model and also a environmental, environmentally sustainable model. And that's where I think the greatest valuations are going to come from in the future.

SPEAKER_15: Yeah. And so this, the SPAC puts the money in, you have a pipe, a private investment in a public

SPEAKER_36: entity that occurs at the same time. Um, but then you sell $70 million in shares at that same time. Is that correct?

SPEAKER_290: Yep. Yeah.

SPEAKER_36: So how do you, I mean, that's something people were really critical of, like why, if you're so long the vision, would you take 70 million off the table in, you know, before the products

SPEAKER_92: even launched that, that was a red flag of red flags for me and for others.

SPEAKER_10: Yeah. There's a lot of people have asked me and criticized me. And here's the, here's the real answer to it.

SPEAKER_11: When we did, um, when we were going through this, the pipe put in all their money at $10, you know, at the $10 share, um, price essentially, which is the pre IPO price for everybody. Um, the SPAC put in the, the thing at $10 as well.

SPEAKER_170: And the, and the, the, the pipe, these big funds like fidelity, um, PSAM, you know, all these different groups that were in that are in here, um, BlackRock, all these other groups, they came in and they said, look, you got too much control, way too much. Um, you own the board, you own, what was your ownership at that point percentage wise? Well, I gave up a lot. So I had 70% of the company and I gave about 30 to my employees. Um, I wanted them to all become rich. And so I gave, I wanted them all become, you know, I don't want all the money myself.

SPEAKER_294: I want to share it with, I want to share it with people that are, that have a 30% employee

SPEAKER_121: stock option pool.

SPEAKER_170: And, um, well, I gave away probably about 15% directly. And then the other 15% through the option. So it was almost, it was over 30% of my stock was diluted. It was taken off 30% of the top to, to those guys. And I still had 40% of the company. Yeah. And, uh, and I'll make, you know, hundreds of people wealthy in their generations to come after it. And that's what I like in life. But the answer to why the stock was sold is they came to me and said, look, we want you to, we don't want you to be the CEO and the executive chairman. You got to choose one or the other. And I said, and I asked him why I said, what's your reason? And they said, well, it's not healthy to have one voice everywhere to control everything. And I said, I can see that. That's actually some wisdom in that. Um, and I've always done everything where everything I've ever done with the board has always been a unanimous consent, which means I've, I've successfully convinced my board to do something. Every one of them. I don't ever overrule my board. If someone doesn't like something, I want to know why I'm a very objective guy. People may not think this, but I, I won't do something. If even one of my guys objects to it, I want to find out why. And if I can't convince him, then I won't be able to convince the market. So when they came to me and they said that I was like, okay, I understand. And they said, we want you to have a, we want you to be locked up longer. We want you to be here for a long period of time. We want you to take $1 salary. And, and also the whole executive team. This is what's not, this is what, this is what no one ever reported on. All they did is report on the bad, right? Cause it gets headlines. So the entire executive team came in and said, okay, we're going to take $1 salary. And that's, and we get stock bonuses. That's it. And, um, and they said, Trevor, we want you to reduce down some of the, some of that control. And, and they said, we'll buy some of those shares from you so you can live on this. You're not focused on money during the time that you are running this company. We want you to have some money out now is smart. And we want you to focus on Nikola, not focus on how you're going to pay your bills or pay for your house or whatever else. So they came in and they, they offered to buy as part of that deal.

SPEAKER_228: They offered to buy $70 million of my shares at the exact same rate they paid for everything else.

SPEAKER_15: Yeah, no, there wasn't anything, uh, nefarious of it.

SPEAKER_36: Just, uh, the, except the signal of, oh, he's selling his shares, but, um, 7% of the total proceeds, uh, or ballpark of that, of this whole thing. So it's not like it's outrageous. It is life-changing money. Certainly it's, it's not, it's not chump change, but you're still have 30% of the company or something to that effect.

SPEAKER_301: Yeah, I'm actually buying more right now.

SPEAKER_170: So that we, we, I made a, you know, I, I put this out there so everyone would know, so I wouldn't get sued. Um, I put it out there that the board has released me to be able to borrow on up to 16% of my shares, which is a couple hundred million dollars worth of, uh, worth of 30% of the company

SPEAKER_303: now.

SPEAKER_170: I about, yeah, uh, somewhere slightly below the 30% mark. And my goal is to get up to, my goal is to try to, uh, over time is to buy up to about 35%.

SPEAKER_80: Got it. So you sold some, but now you've got conviction again and you're buying again.

SPEAKER_170: Well, I've always had conviction, but it's the difference is now is that I've got, uh, you know, when you're, when you've, it's smart. Every investor in the world will tell you, you should take some off the table. Every investor. Yeah. No, like anyone who tells you should never have anything off the table is an idiot. Like it's just a flat out idiot. They should never be given advice.

SPEAKER_36: Diversification is a cornerstone of any, uh, wealth accumulation strategy for sure.

SPEAKER_01: Uh, but you're taking loans against your equity holdings to buy more equity. That's considered a very high risk behavior.

SPEAKER_311: Isn't it? Like that's taking margin.

SPEAKER_170: No, very small amount. We're talking 16%.

SPEAKER_10: And I, so it would have to collapse by over 80 for me to even be affected. And I got money to buy those out. If it collapsed out low, I just buy them out. I got cash. Right. So there is zero risk for me to do this. It just, it's a big commitment, but it's no risk. It just means I would lose my, my huge, you know, my, my nice nest egg. Right. But I've already got my house paid for it. I got my things paid for it.

SPEAKER_312: Like I'm okay to take that risk. I believe in the company. It's all right.

SPEAKER_313: What, what do you need to prove this year to convince the naysayers?

SPEAKER_36: What do you think in the next year or two, um, you need to prove the business model out

SPEAKER_92: and also to, you know, sort of satisfy the naysayers out there?

SPEAKER_11: Yeah, I think there's probably two or three things that are really important. Number one is the OEM partnership with the Badger. So people can actually see who's going to be the OEM that comes in and works with us on

SPEAKER_316: the Badgers or where we're not out billions of dollars trying to build a car that everyone else was losing money on. Got it.

SPEAKER_282: So, so if that comes out and it's like a Toyota or it's like somebody who's built a

SPEAKER_128: lot of trucks, you're going to look or Jeep or something, or I don't know who's the big truck builder. You're going to look, that's going to help validate, correct?

SPEAKER_228: You're, we're going to look really good. If that happens, which we believe it will from where we're at right now.

SPEAKER_11: Um, if that happens, then I would, I would, I would, I cannot give anyone advice on where it's going to go, but I'd see our, I'd see our company value.

SPEAKER_95: It's not, it's not close. The deal is in close. You're working on it.

SPEAKER_11: Um, we have three offers on the table right now and all we have to do is sign paperwork. So we're trying to validate which one is the best one for us. Oh, that's good.

SPEAKER_170: So, yeah, we have, and some of them bring other things that are better than others. So we might not take the one that gives us the most money, but we'll take the one that gives us the best chance of being successful in the long run.

SPEAKER_11: So we've got three term sheets right now on my desk that are, that are, uh, um, that are essentially ready to be signed.

SPEAKER_210: Uh, so getting that badger out or getting the announcement about who's going to build the badger for you.

SPEAKER_170: That's a big one. That's the big one. Okay. Well, that's one of them. The other one is getting the, the, the first ever battery electric semi truck on the, on the road being tested, like in be ahead of Tesla, ahead of everybody. There's like the production, you know, really real production version is not a prototype. And those come out in the next, uh, there's actually five of them coming off the assembly line right now in our factory in Ulm, Germany. So we have a factory in Ulm and that's spinning the first five off right now. We're going to go out and test the heck out of them. And after that comes hundreds. And after that comes thousands. So if we deliver those five right now, this year is game over.

SPEAKER_11: Declos is going to be where, you know, it's on the trajectory of where our competitor is.

SPEAKER_329: That being Tesla, $250 billion, 25 X where you are currently today.

SPEAKER_36: Um, when those, those trucks come out, they already have a, a buyer has already bought them

SPEAKER_92: or they're just, you'll just use them and use them to, uh, sell more trucks.

SPEAKER_127: No, those five are the, are the hardcore testing ones where you have them in the hands of like fleets and yourself, your team and your, and other fleets.

SPEAKER_170: So this is where people can actually get in and drive them with loads and it's safe.

SPEAKER_334: Got it.

SPEAKER_170: You know, there's one reason why you don't see us or Tesla to actually allowing fleets to drive our trucks. They're not, they're not safe to put in someone else's hands because there's a lot of like, it's a, it's a very like, it's a, it's a very advanced prototype, but it's not

SPEAKER_11: made to just hand over to someone. So these are actually made to where you can let someone just jump in and drive them.

David Friedberg: Got it. Uh, what are the chances that, oh, is there anything else on that? Yeah.

SPEAKER_11: The third one is, is the third one's a Nikola world. So at Nikola world is December 3rd, 4th and 5th. When we unveiled a badger, we show off all of our other product lines.

SPEAKER_170: That's where people get to see the badger become real for the first time. So a lot of people have said that our, our pickup truck is fake. It doesn't exist. And it's real. It takes two years to build a prototype, you know, like that, that advanced and fully works. So our, when you see our truck in December, it's even further along than anything that even like Rivian's ever built or Tesla's ever built on a truck level. It is, I mean, stamp panels, it's, it's beautiful. It's done, done, it's gorgeous. And so we've.

SPEAKER_92: And you were able to leapfrog Rivian and Tesla because you've got a partner who's already built all these pieces. You're not starting from the ground up.

SPEAKER_128: You're just putting your intelligence into it.

SPEAKER_68: That's part of it, but it was actually our chassis that, that they're going to help us commercialize it. So we, what we did is we did like the first 50% of it. And then they came in, they said, Hey, you know what?

SPEAKER_11: We'll throw our 20,000 people at it that are truck experts and you'll have the best main truck on the planet earth. And that's why.

SPEAKER_128: Here's a silly question perhaps, or it may be deadly serious.

SPEAKER_36: You took money from OEMs who invested in the company, right? Some number of trucking companies and other folks, battery companies, sell companies, I believe other folks invested.

SPEAKER_159: Are you worth more in terms of a market cap than them in this crazy stock, you know, days? Yeah, we are.

SPEAKER_11: So like Worthington, Worthington invested in us and there, there were three or four billion or three or four times them and they got a billion dollar

SPEAKER_170: return out of it. You think about some of the other guys, not Bosch, Bosch invested 130 million in us and they're still worth more than we are.

SPEAKER_345: But I would see it in the next year, I'd see the ability for us to be worth more in Bosch.

SPEAKER_85: So Worthington was the truck company. You said, is that the name? No, Worthington was a metal company.

SPEAKER_139: So now with this market cap, why don't you just go back around, circle back around and buy some of these OEMs and then you got the full stack.

SPEAKER_11: You could, but they got the legacy of diesel and I don't want to ever be associated with building diesel trucks.

SPEAKER_52: All right. That makes sense. And then when, if you were to guess when the United States tips over and we

SPEAKER_92: have less diesel trucks and more, you know, battery and hydrogen trucks, what year will that happen?

SPEAKER_97: Are you talking about being sold or actually on the road?

SPEAKER_128: I'd say on the road in use. Yeah.

SPEAKER_97: Okay. On the road, 10 years.

SPEAKER_170: Sold, probably three.

SPEAKER_128: Got it.

SPEAKER_353: So in three years.

SPEAKER_170: Because it takes, usually people buy three to six years in advance. So because of those lease cycles. So we're, we're, it's by the time everyone places all their orders, which are coming down the line right now, uh, it's going to take six years to start to deliver that. And then I think you're going to see a majority coming out within, within 10 years, but sold within probably half that time.

SPEAKER_29: So we get to the majority in 10, which means then the life cycle of the dirty trucks, you said it's like three, four years. Cause these things get beat to all hell, right?

SPEAKER_345: They're usually seven years. They go through two leases, usually two leases of three years a piece.

SPEAKER_182: So in 20 years, is it conceivable that we just won't have diesel trucks anymore?

SPEAKER_170: You'll have some still, but I would say it's going to be damn hard to ever buy a diesel after, and within three years from now, almost no fleets will ever touch a diesel again, buying, I'm talking about buying, buying new diesels. They'll, they'll still use the existing ones that are in the market, but they'll never, I don't think you're going to ever see anyone ever touch a diesel after buying a diesel after the next three to five years.

SPEAKER_92: Uh, what are the chances that Tesla semi-truck goes with swapping the battery packs? Cause I remember in the early days, uh, the Tesla showed the Model S

SPEAKER_36: swapping the battery packs at stations and that was potentially going to be a thing, but I think supercharging just took away the, the need for that.

SPEAKER_92: The idea was you would pull into your, you know, on the way to Tahoe, you just take your battery out. They put another battery in, it takes five minutes and then you're back on the road instead of the 20 minute, 30 minute top off experience that most of us have

SPEAKER_36: today, um, or going to Vegas or whatever, but just seemed totally unnecessary. So, but with it's, with the trucks, you know, if you have three of those, uh, you know, I don't think they want the truck stopping for an hour. So to swap out the three really quick, does that make sense? Or?

SPEAKER_362: Yeah, it's a big problem. Actually, here's the reason why if you take that at a Tesla's battery cell cost

SPEAKER_170: right now at a buck 75, their, their total cost of a complete battery, to do the range they talk about their three to 500 mile range, um, would be between 110 and $125,000, um, with the battery housing, including, so you're, if for every truck you build, you're 125,000 on the battery, and then you have to have another 125,000 battery on the site, just waiting for it. That's never fully utilized. It's only utilized 25% of the day. So you have a resource that's only being utilized at 25% capacity that is waiting for a truck to come to it. And so instead of your cost being 160,000 a truck, now your cost is 285 or $290,000 a truck.

SPEAKER_11: So it's a, we've already ran all the numbers is actually why I was explaining to people why you can't do battery buffering for, for semi trucks on the grid, because you're, for every truck you have, that's a megawatt hour of energy.

SPEAKER_228: You've got to have a mega over a megawatt hour of energy and storage, which is going to be, you know, you've got to add another $120,000 onto that.

SPEAKER_36: Uh, all right, well, it's going to be an incredible, uh, couple of years and we'll be watching and hopefully have you on in exactly a year.

SPEAKER_128: Uh, I asked my team to, uh, put a, uh, or maybe actually after the pickup truck, we could talk a little bit. You know what? Come right after Niccolo world.

SPEAKER_97: That'll be, we ought to get you out to Niccolo world. You ought to come to that event.

SPEAKER_311: Where is that going to be? Arizona? Here in Phoenix, Arizona.

SPEAKER_97: And it is going to be a rockstar event.

SPEAKER_367: I promise you that you will not want to miss that.

SPEAKER_52: All right. Well, there you have it folks. Uh, Trevor Milton from Niccolo motors. A lot of you have asked Adam on the pod and here he is. He's on the pod. Uh, good luck with everything and, uh, thank you. I love it all. Cheers. Bye.