NKLA - Earnings call transcript Q3 2020

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Britton Worthen

Thank you and good afternoon everyone. Welcome to Nikola Corporation's Third Quarter 2020 Earnings Call. With me today is Mark Russell, Chief Executive Officer of Nikola; Kim Brady, Chief Financial Officer; and Umran Ashraf, Global Head of Vehicle Engineering.

During today's call we will make certain forward-looking statements within the meaning of the federal securities laws.

Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and as a result, are subject to risks and uncertainties. actual in to this cause the materially could statements forward-looking communication. factors future differ events from Many

For filings more refer information well results press to about we as factors that differ release section forward-looking may Exchange and addition the from Risk statements, Form and June X Commission. X-K on we to in report June today, please issued Company's amended that to Securities Factor earnings filed XXXX, Commission in with with current as materially the Exchange the the as cause subsequent Securities our actual the and X,

speak to of put made. undue statements Mark. hand that, date to Readers forward-looking on they now statements. With Forward-looking are only as reliance I not over are call cautioned will the the

Mark Russell

we'll and overview We're our this third welcome people manufacturing you call, previously context on Thanks Ulm, and Germany on Britton. On an in all pleased call. earnings work progress announcements. give updates Nikola's we dedicated Arizona announced you other of Coolidge, the our XXXX of achieved the for significant quarter to to made some including you quarter facilities continued in today's give our milestones. also Nikola of during quarter, our to Thanks, what

we'll line results. And the Engineering discuss financial Kim Nikola of that, a our primer the course, We Tre. will battery industrial insights different prototypes, at short on the asked for also in complex want Tre vehicles groundbreaking open systems this to for there. do technical Head in our IVECO to Ashraf, into assembled electric you the Umran give Germany something Global Vehicle our Ulm, Q&A. Nikola quarter, some which up being then After We've of are

GM speculation not when services with a give give but discussions our appropriate or yet ongoing agreement, equity discussions of do in exchange in GM. about further brief Motors. we'll kind stake is continue Let various required. lot for updates which Nikola me The comment would contemplated an and in been with General a There's about start closed you

you Ulm, facility Arizona. Next, on with IVECO, and is work an the vehicle manufacturing cells, work civil venture we’ll manufacturing process. production with building the joint assembly update the delays. manufacturing including line in substantial we've venture guided work will Coolidge, also our tilting facility and tools the the of COVID IVECO’s that the utility, of completion have let complex me Ulm, made to barring on partner, the Tre refurbishment the automatic industrial joint Germany, on drivers facility systems install progress Along our and currently in impact been be further dedicated in and our cells need including greenfield infrastructure Nikola within Construction completed, and of related in floor. Upon manufacturing there, we'll progress heavy-duty

All ground to for Arizona and our end construction to and submitted by Coolidge. began, master earthwork August, began is approved In site been work utilities, grading of in this work Coolidge, broke the preliminary complete in facility’s of manufacturing be for and facility on city the greenfield July, Nikola in ready the plan October. and the of it's completed grading site production of of the XXXX. is by preparing on track start

this partner, will steel preparation month pad initial through manufacturing and December utility January. erection foundations, October. the and Our also Building slabs Walbridge in subcontracts follow floor building awarded and in continued work

and with we is initial engineering Coolidge's the frame brake has have thank provided on and submit result including secondary we'd which the working commercial Manufacturing X dyno and turning, as And continue for cleared such well-defined services, programs’ roll underway, lead the responsive building equipment, that schedule. marketing, for city stay on work in to excellent dedicated power vehicle primary engineering has We and are vehicle department, like safety, focus manufacturing of the each and key development, on support the closely with mandates required, think production solutions of now vehicle software, programs for to business XXXX. such in executing heavy-duty hydrogen of for fuel-cell achieved. helping platform the a construction, battery set test. our our as will and process Class permits as of the vehicles. the of Based focus critical production Coolidge by vehicles specially such battery to drive followed trials teams structure the serial trucks. us To to a been production and heightened to vehicle robust Class now end our us meet we'll have rate of continued concentrated teams electric our our aligned organizational we've electric leaders Tre prioritize milestones. for vehicle for startup that match mid-XXXX, ramp key to respective and and engineering limited Dedicated on starting a electric objectives be up dedicated work, of a technical our start recently create both of for fuel-cell by functions and X demands as ready current all accountabilities. are two We Shared milestone design, and

brief Steve was of place board of take Chair Steve as member to Shindler, Chairman Girsky's and Committee; the the new regarding aside SEC concerns resignation our the and and a execute and the and the Motors leadership appointment perspective our you to legal his we elected before and a appointed now XX, me a welcome to Milton Last Trevor Director. on former by Vice changes. turn we as seller. finally, priorities. Independent accepted Audit Chairman just their our board newest board continue The Executive Bruce of On who and Board. pertaining give was Chairman. we month, approached short to Smith, and also independent a and Steve Girsky, as Bruce leaders Steve the update. report and announced our the board contacted is turn are over who two Board proactively General to seasoned the I and regulatory Let's And Both quarter as it during members, experience step volunteer published recent September from Nikola Umran, of brief to let

in achieving Our documents. council and has and been SEC Justice, the stated drive electric and Tre Umran. close some technology you He'll forward in remained in continuing cooperating new prototypes. we of for over our contact for business focused to their fully Department turn create insight our value it battery to requests Umran? both the With milestones give the exciting are with our employed in information I'll and that, shareholders. and on our into We with

Umran Ashraf

kilowatt of the manufacturing electronically BEV, fully springs rear such to This air steering duty management, Tre XXX controls battery medium XXX projected the safety partnership up at of to class vehicle motor and range drive battery motors. elements voltage with is variance. volt for both is entry dual design suspension system. by the an all in And U.S. for architecture, architecture haul. management. Each axle. Germany. trucks our six The for system as Mark. peak while of controls vehicle X air brakes, drive Nikola capable and also vehicle pounds continues up by and weight single Nikola’s XXX technology human range suspension of a to with a to sophisticated into flexibility truck truck, to the steel they the battery missions, like facility structurally unique packs XXX XXX and connected X including contributes prototypes continuous user hour engineered controlled with dynamic thermal vehicle built torque telematics with production control liquid commercial focus with big maximum ladder axle, a the integrated durable, kilowatt management, of being with battery of in X including XX-inch parallel Coolidge of Machine the part of Nikola solid are multilink The with air extreme platform large market smart features and and propulsion electronic management, in for all and at chassis Nikola a the frame tightness to truck a for Interface a load classified is working miles, meters that over for controls the volts architecture, the Bosch of assembly assignment smartphone, combined into interface, engineered stability stiffness applications energy characteristics X,XXX management on hour. and an electric mass communication. vehicle system, data integrated modular XX% packs. battery battery state-of-the-art still onboard battery for start and XXX navigation, approach the for optimization multipack associated integrated including operational. IVECO These XX,XXX the vehicle HMI and grade with climates. approach their kilowatt amounts IPXX hill include, and integrated Class the distribution you, multipack strength propulsion is the Tre multi-packs X,XXX architectural has for BEV’s features XXX the for The IVECO. speed, system. that electric prototypes Nikola It Nikola the for a disc with and environmental truck. scheme has with infotainment. heavy S-Way update functions, trucks progress hot XX electric a managing controlled Class BEV two cooled delivery thermal consisting electro-hydraulic conditioning control stability the The Class a peak into miles is battery at such truck of portfolio is the system Thank electric encryption truck until on developing five for high architecture They're handle electronic are that development axle potential bespoke as Arizona Human ABS, cold symmetric Ulm, elements keyless configuration IPXXK Ulm, Newton cloud, the by system from integrated our speed energy hour emissions gross performance first Key redundancy of and electric cloud high features integrated for Tre kilowatt parallel nine active vehicle the to truck chassis per enabling onboard inclusive With are thermal short air and includes accelerated handling managed a and with heavy-duty in engineered voltage leveraged PMSM system X meet is Germany zero machine

track first test much first debugging. The and integrated pace Nikola assembled the truck heavily and torque proprietary the at second systems undergoing The commissioning, calibration is command has Nikola will truck. faster are progress than Nikola of systems the using controls been Since including a software. most commissioning on trade Tre

As gone second the debugging software will the and have completed first can vehicle completed be truck. slashed onto on through

by four roadways in testing, XXXX or with QX proving transitioning XXXX. the joined to third kickoff select half testing payload cold anticipate target remaining on now to the of to prior We first the propulsion, to prototype it track endurance, consist accumulation compliance. completed Nikola‘s and testing Kim quarter mileage hot high Validation eventually results. routes phase full for over expected by testing, half the trucks We that of regulatory the the financial discuss start durability completion end hand I'll of brake testing, on be second Our XXXX. XXXX, tracks validation on commissioning the will assembly is defined of is testing, XXXX. QX weather anticipate and to QX of ground range

Kim Brady

you the provide announced would XX, We now quarter on activity July public warrant redemption Thank a financial third of and public results. on cash our warrants. Ron. of a like August review completed and the market On to basis I process redemption we XX.

into were an balance As million additional shares resulting sheet. a of award warrant result cash in $XXX the the redemption exercised common XX,XXX,XXX to warrants of

which quarter. third million, functions; $XX.X costs EBITDA negative and Net consist non-GAAP of stock-based and compensation EBITDA Focusing $X.X the matters, electric was of for totaled the million fees on legal incurred in materials, and BEV vehicle and September, to short analyst were professional report engineering cost flux. $X.X engineering Research and other these research R&D in in-house seller $XXX.X depreciation and in on million basis, compensation, million of adjusted from per $XX.X our This the stock-based with equipment. $XX.X stock product third-party validation, connection outside third-parties expense. service development XXXX. and for regulatory million loss the in R&D results million advisory development related amortization development; primarily following, in and and fuel expenses support; a $X.X including facilities and legal, represents in services; Nikola million, cost incurred excludes expenses include adjusted vehicle prototyping supplies, in-kind integration, to for such expenses depreciation and for Iveco fees cell services paid and

We expect to research our and for roadmap. development increase achieve our the to product and future foreseeable costs technology

expenses company quarter advisory; expenses, and compliance. fees, approximately of million and third we such public following stock-based expenses incurred mainly fees SG&A insurance, departments; corporate legal, of XXXX, the million compensation. professional to for costs: During which $XX.X $XX.X of SG&A SEC of financial personnel related as is consist related the costs accounting

a scale we as as expect headcount the SG&A the company. to a of for with and result business growth as future expenses operating We our public of our increase foreseeable

now steady pace anticipate end major of more at we will to our total By XXX headcount our is Our and continue XXX. team. but headcount a XXXX, be as build exceeds growing the we than

million Turning restricted to sheet, with term sheet. loan the secured deposits balance inclusive collateralization outstanding cash cash. holdings of the of manufacturing is the we currently facility. construction no Arizona Restricted We Badger, ended deposit fully excluding million cash balance equipment to aside equipment the P&L our and required our X.X of $XX land loan debt approximately by from Coolidge, of the restricted cash associated on have $XXX for Nikola quarter cash customer million of with third and equivalents, cash the

Our capital legal per was million of quarter share capital per in $XX.X was quarter. expenditures cents third expenditures are during third The comprised and average shares The loss share net loss $X.XX equipment. previously third stock-based investments compensation $X.XX year-to-date regulatory share million Non-GAAP $X.X for the and the quarter mentioned. net cents. loss excludes the XXX,XXX,XXX. mostly totaled R&D weighted GAAP matters and for and per net was non-GAAP outstanding

we As We milestones. stations. Nikola's announced the procurement electricity progress company, pre-revenue achieving remain to hydrogen a to committed of evaluate collaboration for way to our is track best and goal announcing believe result its partners fueling toward

during remaining the is achieve continued a remarks. fourth transportation and aligning Coolidge, quarter concludes prioritizing of milestones expect progress resources the of of make industry. to and the groundwork programs we in facility. BEV addition, laser Management emission the the Arizona our to and these XXXX, toward leader on Tre In becoming construction assembly zero This focused lay toward prepared

now We will open the line for Operator? questions.

Operator

your is today with Osborne Please Jeff question first from Our of Cowen. proceed question.

Jeff Osborne

good guys. for the Hey, detail. all afternoon Thanks

end. a to was doesn't that, the And plan would what as be the Just and you could a into what fuel through event if on as I'm the of fray the GM wondering more couple and original in agreement for prior battery to coming X supplier, go opposed fallback questions program, was my the Mark, talking I supply cell go that the plan forward? Badger. class

Mark Russell

– And and Korean from going we base Sure designed vehicle next module Tre pack we cells Nikola The is already with BEV, vehicles. contains and going production we've we of Jeff. in which But have pack of going have be give which the is year. given what on the generation our format be on that by are production battery system and it is engineered, developing plan our option into for a that that's next that battery a path which vehicle with developed based us engineered agreement based large the another non-cylindrical battery going a Romeo, The primary pouch options would that that's cell, for with a or electric contains GM now. into we to into was our for GM was generation would production will with two cells, Ultium designed that are supplier. which an

able that GM we’re and to us technology which option hope one So very reasons of event aggressive, our hit. additional to they in the going And which is in targets that's vehicles, deal. terms performance was next-generation an cost, the give in the especially which and its interested we of are just hit doing – the for –

Jeff Osborne

you That was their don't as that with the relates all, at event And development to them sense. in you touch cell there? can JV, the just plan on, program it with Honda makes fuel what use as the

Mark Russell

Yes, it's Jeff, almost same the story.

in designed of So to fuel our is vehicle. truck, fuel also are. and Hydrotec collaboration cars. years, used specially have engineered heavy-duty most a passenger cell to cell for cell heavy-duty Bosch fuel but developed system, base impressive plan be it's go a system production been from into number Like that with an now over is we in Motors engineered with right systems The General that's

deal which and by would could plan future with the – using use testing. we’re impressively, So GM backup the our and iterations for way, tests of give then with system us our – that we a the vehicles in Hydrotec that again the impressed technology, very that

so love the for system for is And into the we engineering fuel our our that as system. plan addition are with option base have to production we've we the in but system vehicles, to to an the we'd Bosch, developed, already vehicles use cell develop and

Jeff Osborne

test then And moving? is Tre track quick It that the unclear torque, today? picture just work for was you have that two it of, with You Got it. the operational is other alluded ones. actually to

Mark Russell

it's has on been track, it's on the it commissioning. the in Yes, dyno, test been

Jeff Osborne

I to can right with it that question that What that recognize you public? relates for as the is either alluded placed That's the order great is to stations? of build-out timing you to of stations, reiterating going us you of last after the hear. And just agreements, my understand helpful the you talk the Kim the year the you of announced would But it. correctly and end timing if you can will then economics be your about station under have first what partners equipment by I construction? to which showing and of certainly electricity up that when is heard have you'll remind just

Mark Russell

orders part next those single after that electrolyzer time that station. each. would in to stations most so the year, enough hydrogen then tons placed enough them in build We each come – of first be to have we. equipment to station five ordered now up lead production equipment, of time expensive deliver X tons of the We capacity, is ordered of most they that We stations online which to enough installed daily and expensive X the

that make were to make have the that is to us on to in the did we the that we milestone we So get we've of lead first previously published, which sure year. ground that the station in hit time next underway breaking ahead could curve time sure timeline our we for

Jeff Osborne

Excellent. Thank had. I you. That's all

Operator

The next Morgan. Paul your with is of Please from Coster question J.P. proceed question.

Paul Coster

for financial with. to thanks promise bit all proceeding question. related of taking you by Mark. reported, shareholders your you Yes, But the a off early regarding And December? initiative. Badger to I'll Are the my What in GM, that desirability They're comments that I deal around message to still you can start with times I not the to convey committed the closing want do little were think initiative? contextualize

Mark Russell

We – being point. consistent been we think to would and updates saying done. can't just dealing And is do we're get very regard all it you when partner. and the – given deal doing Paul, with than give – we this we'd can that at any that you. as announced color can GM without that's that more Badger, we'll the GM we've we give the needed. I with And to unfortunately said, partner, with anticipates already then report in Well, the Badger, I interested when. it a we if GM, we like goes It's

Paul Coster

before? it's us initiative to million proceed of us to of million, versus facility non-GM Badger scenario, roadmap of some at and kind give far How of The a entailed the nature up better how you well, do just and the Okay. with get GM cash essentially in of some and What timeline how does I maybe the $XXX at investment plus it sense spend of that. loss either kind your in not GM. Badger you the down $XXX looking Can scenario? some mean, long saying, with quickly? deal

Kim Brady

question. great a Paul,

be to to talked we'll but then, you commitments. and weeks, the it's and we is are we next until have then that detail. you it's clarity in to with the As difficult showing greater with about going get terms previously that we extent works, couple still we additional move there know, capital forward any with transaction, the this in right, something that GM here the of feel in respect Badger, of you’re corresponding But confident

move as commitments. perhaps of to to as are BEV, Tre As is U.S., we we delay Tre kind course, Nikola as To with consider considerations to there as as expenditures. But respect into well well expenditures as with cell capital about prioritize have our And fuel number Europe, about for that a give we our ultimately forward, expenditures well as it some that operating all priorities important think Nikola cash then our think CapEx all ongoing and with programs. the commitments, at capital we that as closely. context, now then we to we as well operating respect our could potentially potentially discuss able right you be and of of have to our we meet think of to of that, feel of about GM pretty some extent our XXXX perhaps that we'll those position, confident looking XXXX,

balance, of anything cash the the not estimation we're our in Badger. to including relate Now,

talked million about at However, should we balance we still on Understanding $XXX cash that, end year with have that existing we next adequate cash based believe as that flow sheet. or could cash and have, that on we likely more the we out will that we have that market year of that in need and equity. owning additional always when we will do last that raising some the And we potential advance actually consider quarter point cash. a suggested

when terms time, we market really need next But again, some shares, year. cash related will middle the depends can once and in exclude of the Badger, need when for our market condition we any we if just actually on potentially we will – we and think so CapEx we dilution of And optimal think be time to to minimize

Paul Coster

Can $XXX Badger budget excluding the of year-end balance clarify or including you just expenditure? expended cash is the million the sort

Trey Karlovich

Excluding [Technical the Difficulty].

Paul Coster

Got you.

you. Okay, thank

Trey Karlovich

extrapolating CapEx as fuel this of all hydrogen operating Tre Nikola well need cell, we to CapEx well expenses XXXX, all for as that as stations, as needs as, that our BEV, Tre the well Nikola we need for cover. as

Paul Coster

off So scenario, And circumstances need to any Are back additional refuse in capital last unless sort about you a make bit sort to the ones the there intentionally the that dynamic, and of of then us markets permit foster under or holding truck come with XXXX, of everyone sort seen that little to back you maybe question, talk just don't we associated it you. haven't worthwhile. period Got a Mark. orders, deal. just has turned founder whole since customer for

Mark Russell

only away getting time don't and that's going election that that States number I week, or or period. United fadeouts every of I some rid time it shape that number targets has Sure. that higher. been The can require need form of accelerate. the gone now. vehicles and That for jurisdictions not at bans interest way, to outright pretty years going vehicles zero of been Paul. increases think has whole and jurisdictions the with vehicles the in was watching are fossil-fueled or see results have I've the in our The of up never much many the for And for down emission not, goes this

meet everybody the commercial So and fossil has of to going take the to we've the need many transitions never for emissions. market, And because from of it the to said we welcome the many competent vehicles been higher. and into we transportation for, times that effort needs it's think as capable demand these players the space, fuels

launch So who and and business demand in they with our about very our being very problem. past help model. plan why can just as the the – it's partner become careful ways And in we on We front. customers to many We're seen and very [indiscernible] that's you as careful partners, Bosch, and see us with selecting been or you've in partners. not them. customer we've our be a selective consider do They

Paul Coster

not So you're actively moment. at new seeking the customers

Mark Russell

No.

lots conversations All who have careful about is with. very, on. I'm we're customer contract We of make saying that very we a going hard

see careful that. continue about be to us You'll very deliberate and

Paul Coster

you much. Thank very

Operator

Emmanuel Please proceed Deutsche The with question. your is next Bank. question from Rosner of

Edison Yu

it’s hydrogen have you've couple indicated Emmanuel. of on milestones may a follow-up a before go we for I stuff of past you have questions some in said over the order, indicated can earlier. Tre I to on expect Can what you think the partner. Hey, Edison just year-end? a

wanted we those of Just of should out there? to thinking check kind pushed and kind – year-end? What been still is expect things latest before what

Mark Russell

are interrupted think. increasing for end some in Europe. got targets of the station would that slowed announced infrastructure a like would little have Those have down collaboration because We're Things the bit like end good a and dates. we We still we And agreement targeting side the hydrogen additional travel on those year. an We recently. to customer announced by got just the had us of by year. to of here COVID the restrictions still

So before for done the of not year. didn't of calendar I New would slip get the they year. and them a travel things bit into anticipate If had being that. a like of first this Year’s and in slowdown just we've the little announcement able done far ready trying very by – terms point, to But those of to the deals we're get at we still end would

Edison Yu

Is ago. types of way have months was thinking And or What partners rumored press kind think that's want you the of the on the couple you it. go is there something – in about can specifically you – what go still, on I four three the over the involved. of thinking and on or hydrogen exactly looking for? to the Got partner, press report you're – of sort

Mark Russell

No.

how things So the bring players us had different that's some and we still see Edison, table. with some to conversations for for they to the now time we've time, have different talked

networks of already, existing fossil fuel which You U.S. trucks are for the locations and that in are They heavy operating helpful. have people have Europe. stations

energy electricity one. have we already You utilities, renewable in electricity the have space, people which traders, partners, of

producing which We panel largest the have significant hydrogen industrial array, space, of much And with usually integrated time. one have to And had already providers space world's and of have who you you be gas for us. players investments is others involved who same all energy a pretty have one from as reasons people like and who the are hydrogen and in of they existing uses in already things their Hanwha, majors the at those well. the solar makes who that's market distributing and this in would fingers solar then

will be I of we supply So, that makes each expect chain, with done hydrogen with segments are some I done. And what building of that which with. one we will before – we doing we that start first to on we're our depend we out business have pretty those above. announced in most fueling much people sense done deals one network the the stations of all in before believe will our

Edison Yu

Great. Appreciate the color.

Operator

with from Joseph Spak your RBC question. The Markets. next Capital of question is Please proceed

Joseph Spak

your partner on with follow-up much. and of very Thank want partners. maybe comment the of sort other the to Good Mark, some you infrastructure afternoon. just

of Has there any So negotiating to partners issues. perceived travel you the or change noise all logistical company? given either been other caution said, from in some around any – this as some in as the positioning, hasn't is change and due there far been

Mark Russell

the people Well, that seller people – we're could to and can anybody exceptions in that generally, else. I possibly that represents. obviously that the I'm were this opportunities news the there markets structural focused change don't like talking report But are global and are the read by the long-term think distracted and strategically, that. short to probably everybody But generally energy on the reads people sure represents

the I and know. us thought that logistics are terms at massively that talking saying that mean just not up things as moment things to would the I'm down. us and loosen travel of in you and continue that's happening imply, I at so we this we're – And only to thing slowing slowed that which here the about is don't to logistics down, want point has think –

that's us things than be strategic distraction again, again, these able to So we reason a for to and is ever. that also do stronger believe the

we're that's on was something the not it first. be last one that will going will that as I just this not you're and us that either, front – to be see the So mentioned, where to confident, announce

Trey Karlovich

And about, electricity in Mark single simply is to about Joe, insight, a the talked is think potential When matter location right terms we right additional This you a greater it of all perspective some give as of into it's collaboration. contract. much potentially is it to procurement about a location, price? not even from the

right to makes we so, strike is the for in we've Hindenburg parties. can it's that all of when matter that terms And discussions that prior deal report of And we after. suggested both had continuing just sense

much very But we we and course, going, you going to nearing discussions all it's tend what to have are year-end as those not into that when down, we by COVID, we so And well of QX. committed especially on anticipated slower are sometimes year-end, due than focused have partially holidays. if slow are accomplishing as

Joseph Spak

system is And of obviously would it? on Okay. the electric chart guess that color. labor split also Is truck, shared. call architecture once hydrogen made the of recognizing a different the division X, you on of Thanks it vehicle to that you version how Slide should with possible a let's the The expect exception maybe Coolidge, I battery Tre all for we – need in like battery introduce that how that would relationship. look

Mark Russell

we And the key trucks Joe a say would that we much to as European have can supply system. just establishing trucks general, look much put for for out vehicle Europe the as North we're I'll it. start as Obviously our is European from way. supply and in chain we it. American started the fuel-cell chains to we American did those that, make to straightforward somewhat practically as comes materials electric since that is got is going terms be thermal a there. that of then got got in providing start not parts be goal a amount And which make before practically bill North more then And And the truck we're sold. for So of software, the on that thermal in with, of intended the supply that can truck the the to parts the of the together bill Yes. materials chain geography IVECO fuel-cell that We've will engineering deal. long-term be part We've disproportionate there. addition – with similar and matched we've the will but the had on with

actually, look be minor party. fuel-cell will responsible they have very you'll Nikola of maybe couple system a other where differences but primarily a and So similar will

Joseph Spak

these have like sounds one for there's is, me you year in more you I'm My also sort like or more quarter so five of like still some of and testing wrong, it XXXX. they're sounds are to first for and the Thank but sounds validation it of before by customers. correct the if Tres of me sent But internal your it end that. still last the

So get to to and to can to the ahead operate vehicles before and expect needing some them see when how go fleet, you much you long they incorporating just update own their with to larger their us test to costs orders anticipate be customers you doing into fulfilled. it on again do how testing, start

Mark Russell

be These and correct. are the on production for They testing road be are prototypes. only. use. You will won't validation and not We'll be for them five customer using sold

customer road building fleets. in some further be will able used prototypes, which sales. road will testing then be be will will producing we for go we'll regular the we customer and on – fall, be year, for to Next And next of

that to of shipping XXXX production reasons regular is try units on one a again, we from customers be launch end And one the our customer So into focus, limit the of for specific will fleets. of our focus and the serial to number to can, number we want launch with much with as with concentrate don't this to huge that involved like customers. doing we'd in practically of each get number of trucks with. a a of as we're customers small customers work We

collaborating So testing validation. design us with on we're and going and the vehicle the to the –

Joseph Spak

forth. back So there will be data hearing and

Mark Russell

Yes, Correct. absolutely.

Joseph Spak

guess And of of we economics cost just like one commercial as all the ownership. again, and Okay. purchases how I is truck – know,

how have they before trials, to these to initial to need long customer data? do So they last you good think do really get need some

Mark Russell

for will team. we're hope only of knew the get data have batteries, example, course, that But to back lot at and partners for sharing years. trucks like good of it batteries we our but that. frankly and announced that some they test We commit be data that a of course, take just the result, working get enough until that were since that for we're terms information data are same life and good customers. believe that And for them – as data from to seven with seven information And everybody we'll great we but time the experience knows be end take wasn't we on some actual and the get you we how they as accelerated deals volumes share to were accumulated of there a knows. and with have out of our upfront data target that we'll to same health out customers. lot basing a will our this we cell, them because we really do we're testing, they – the with in they'll that years, Tesla volume. of share our will like they Well, have for then battery. And things simulate And And of of prove think out. share end everybody on we base the We of turned as to data we and the

deals and see you'll more like more think I that going forward.

our test our going to to but trucks for be give We customers. launch on purposes is priority will customers

Joseph Spak

much for the information. Thank very you

Operator

is Ives Dan next question. from The with of proceed Wedbush Securities. Please question your

Dan Ives

for And thanks all the insight questions. the in Yes.

So months, my seems obviously go when a – been there. you've we for what's just team. it it, you in few to overcome but back I’m first, the I'll question for stop last Mark, the And challenge the of lot biggest that

Mark Russell

like design. and ridding point. get comes get of And And such it. a And of fuels, validation, worked of it perfected own who are and they've over they've been for never understand building job. requires we at century. has tremendous was have lot we're years amounts location, Well, system. have And team that of of partners a heavy this so we amounts trucks we trucks industry have what force actual and are Their build really, now to fuels fossil where world different that this, our simulation. iterated engineering, incredible down verification tremendous at this an over asking building them building is amounts with just good that but strong done tremendous heavy fossil different to a challenge century. trucks who something trucks to completely do And us biggest really we're grateful heavy to motive It us by ago. grateful XXX these don't is a testing to with work. got completely facility And our We're The been the it vehicle is logistics, people a disrupting entails. who when powered

over for the of world. that We solve us course, to people come who've all people fuels. have a in And and world emissions. about, things long come electric few range, And Nikola from stuff, players, established both. the have solve we for And most that's long if to other the the how an people any is distances, to emissions. of from fossil all mission. for that's And Nikola one short is plan incredible for we commercial And with team ground. going whole help can for We're that's battery single purpose is the succeed, the of heavy that zero transportation we're fuel-cell That's do rid one here range. of a the electric the cover have challenges we what you motivates one trucks we're get – we toughest passion trucks have if world that successful one the all think of to difficult

Kim Brady

last we've same in the terms distraction. four recognize effort think we realign about because six but as in I’ll of that, at I course, to the time, organization, had focus been to the for we weeks, Mark of Tre talked of realign. have some and put amount board we understate Europe, when we the into that as as And as established And Nikola as fuel-cell strengthen have to as able Nikola with U.S. BEV, timeline well as well that, to priority been able well to of for the our respect Tre

because that And that, really I execution. has gone so accelerate in prioritize. team really our terms of important fully able that's we through be want and to efforts And the of recognize to to focus we'll think

Dan Ives

partners of a trend, Nikola, you of hear in of to year? next terms on sort hearing to Thanks of the terms are you partners, – looking from old more an the in from partner Thanks. versus you, and from, you vision more wanting that you're to expecting for part different the is Are obviously answer. from side going starting but selective, weren't be this hear are maybe push that hydrogen areas fuel-cell to be partner perspective, pull you a of a to

Mark Russell

this into Well, heard we ever surprised that that at the because point, as I we run Nikola this Everybody are. I'd before. sort if of few the haven't dramatically, expands everybody heard of people who we side from months one last circle a knows now. interesting be And of point, have few effects we that from at think is

in aware aware a has So that talk people we think to having I to some weren't to space, that focused But were beginning. from – us, things the we conversations of was talking us the very some has weren't willing got and on brought few everybody that to of that we and who led us before.

of like the makes feel partner in for that everybody with grateful partnering with reasonably And we're interested and both it us. we're with us. conversations be a pretty we conversations And where could good have sense people for so we

Dan Ives

Thanks again.

Operator

JMP with Cauley proceed of Please The from Securities. Hilary question. is your question

Hilary Cauley

follow-up to kind of versus conversations that of taking able more those for give there? context kind just these Hello, import of kind you on chain to kind the my when focusing or additional to can any timing and getting of one earlier this continuing domestically thanks expect and on you materials is of already ongoing, for up to are be then to some of I've the wanted and source questions. running are comments about supply focus focus first these. on the And

Mark Russell

a on good So, The basis line materials is XX%... for Tre of that's a than question. bill Hilary, is more XX%, the more than

Kim Brady

to XX about XX… Probably

Mark Russell

of materials Over by line IVECO CNH. Tre item is the the of the and bill for XX% stock at bin from parts

blessings of in introduced make IVECO of And partnering a and trying the The not we the was the one tires as with other So, IVECO, the than XX. the truck, wheels vehicles to frame, only July that's world. -we're frames of we're innovating one cab we're diesel innovating newest the the it. and can in because way. and and body, make not by white, S-Way of That's everything parts as good of

it specializing that value recently battery, comes e-axles, make an the Nicola part in the partnership is lead vehicle new lead a Nikola XX% But the materials validated engineering very platform that bill to the and So software, pick thermal the parts our systems, of than had vehicle the vehicle. than in on, IVECO. and less of motors, That's the taking the systems, with the and inverters, that electric the of we of the on the the of in control XX% takes the the is more from.

anybody North materials way been is to products with we American think future world, the existing world-class that. because that's and led no do. on thermal, and a in willing partner bill the So with and with Meritor interested with that like the our Mahle sees what WABCO people Bosch, we And the same in is who collaborations of was are mix we'll the presence. rest very IVECO because to The has European of manufacturing – focused we've

supply So that's to do, what as a is mixed both we we're said domesticate trying bag. chains. And

of to for that right and which the parts that the materials. Europe, are now. European from States established our is States, in bill would as soon as United for of example, supply currently coming the lot the are a are We practical batteries get like a sourced chain United sourced from So the parts existing

like those several – we things for For And that established take fairly get those it want We up the supply a some you frankly, will of things as as domesticated some practical. of to for some example, anticipate to quickly. think soon for of that years, we happen would chain can parts.

to few even domestic. So very on varying might will years it'll part get quickly, completely few depending then months take some a the take be and answer some a

Kim Brady

impact between sourced. review of import volume some have localize trying to we parts year a want by where weekly In to majority that sometime this could and to on the we as on And of recognize towards some parts XXXX process, all end internally simply continue the will than at IVECO the be to is take half. But longer we extent based parts And potential localization longer a basis over next being components. sense BOM. a volume sourcing of that is goal and and from looking take ultimately, get of make simply all indicated, Nikola part, of those we terms because longer. would XXXX, are may components counsel Europe that type And to on be but Mark it position and that the early a live and have localized, about it to to

Hilary Cauley

field in and and obviously, truck that's those I could had for then see we backlog sell timing,and Okay, converting the just an Thank binding some pre-orders and I'm all impressive a orders, you. share you. there. of when might any of And start guess, if wondering, to thoughts great. lot quite wondering I you of to interest kind

Mark Russell

Another in window. the focus when good orders getting one-year firm, and are question, on been they Hilary, has thank you. The fixed

So now to in way, year like either rolling to But time. have That's when going time one have, from reached production, that's firm launch we're to we from target XX place. course, we looking place. in of would kind from months as commitments a to vary customers have we're we of production,

production so fuel-cell XXXX, be XXXX. And one production truck in goes the in from into fuel-cell year for will truck

year customer than faster XXXX, can this, in in place production. to but I would out be targeting have with a we hope a hard launch do a this we so contract And from

Operator

The next Raymond question. is from question Molchanov Pavel proceed Please of James. with your

Pavel Molchanov

for taking question. the Thanks

take step a back. Let me

minutes election the obviously, few about your decarbonization. and referenced comments ago You a given

what – whole through the would see administration? lot, Biden actions like Let be can you you perhaps not me the do you ask, encouraged just a to would get any executive that what from Assuming, by? Senate,

Mark Russell

which Biden the the be the of aggressive that country matters. like the the administration in Trump these on you've And California. green whole possibility the deal, more got expect event new we to look Senate course something Well, of than more democratic to administration then like the makes falls control,

things for for business model. the be products those will of positive for demand our profile All and our

Kim Brady

And about think talked Pavel, we this. I

government the expect Paris accord, respect administration, of Biden we federal we've green greater and would With participation – with to the by much energy. restoration

fuel paying wean can jobs U.S., Trump this important that This jobs. will I to the extent you with as off important, in the think there an but think think definitely look a green energy. the less been perspective is And that fossil be the in change. transition, on create have going on we creating we high that focus to especially centerpiece they is at of that's emphasis administration, terms and new that

be to so And Nikola. it's going good for

Pavel Molchanov

One about policy Europe. one more question, this

really expanding for of consider which historically your part which the construction I megawatts by think been have this decade. you to some aggressive that station in targets, electrolyzer climate be would are due there targets context, European the end XX,XXX of law, Europe, fuel next As small? month, is approved In pretty

Mark Russell

reasons comparatively to construct The that than in size. one Europe because Yes. Europe, of are trunk the average is the larger higher to of believe U.S. be the is planning we Europe stations we in volume Again, routes will on they in fewer

of government to Europe. some are action There We also impressive, large scale, electricity, States. green production comparative in increase the compared see government very projects electrolyzer, action led led in greater hydrogen the underway Europe Europe in or United

facilitate would involved be involved infrastructure helps and very of think we the rollout along want them we with, save do to planet. our projects. like network who which in get and to them. the to from there. we undertaking parties to following people will that it want talks building and help our perspective, in And things some of part welcome And to those and the these in that We be all accelerate of would of impressive are encourage we we're the Some this

Pavel Molchanov

Thanks very much.

Operator

additional This will conference. There questions are today's no conclude at this time.

Thank You your for may you disconnect participation. lines. your

Mark Russell

you. Thank

Nikola (0A3R) 9 Nov 202020 Q3 Earnings call transcript