Joint Venture as a Perfect Partnership

joint venture as a perfect partnership

Both Iveco and Nikola describe their European joint venture as a perfect partnership, but what do each get out of it?

The benefits for Nikola are blindingly obvious. Access to a donor vehicle and a ready-made dealer network, have according to Milton, accelerated its European programme ‘by four to five years, and saved half a billion dollars’. But there’s more to it than that. Not all of Iveco’s investment was cash. Instead a sizeable sum will be delivered in services. 

“In the US we have a beautiful truck [Nikola Two] that is already on the road, but parts are falling off everywhere, and windows are cracking as it goes down the road,” explains Trevor Milton, Nikola CEO. “What we wanted to do was figure out how to prevent that from the beginning. 

“And so, we told Iveco, ‘we’ll do the JV with you in Europe with the Nikola Tre but we need your help in the US’, and they agreed. Iveco will help us through the whole process. They’re setting up our factory, they are designing it, they are designing our truck with us, they are validating it, you couldn’t ask for a better partner.”

In return for its investment, Iveco’s parent company CNH Industrial gets between seven and eight per cent of Nikola Motor stock. But more importantly, it gives it access to Nikola’s zero-emission drivelines. This is vital if the truck maker is to hit the EU targets of 15 per cent less CO2 by 2025, and 30 per cent less CO2 by 2030, and avoid hefty fines. 

joint venture as a perfect partnership

Hydrogen Availability Conundrum

In order to avoid the age-old chicken and egg supply and demand problem, Nikola intends to construct its own hydrogen fuelling/charging stations, both in the US and in Europe. While it envisages needing 700 of them Stateside, in Europe it believes 70 should suffice. 

European hydrogen stations will be opened in phases, commencing in 2022 along major freight corridors in central Europe, including France, Germany, Benelux and Italy. Phase two in 2026 adds the UK, Ireland, Scandinavia, Spain and Portugal. The final phase, which takes us to 2030, covers the rest of the continent.

These sites will produce their own green hydrogen, using only renewable clean electricity. In most cases this will be solar, but on occasions wind will be used.

Each hydrogen production station will initially be capable of making eight tonnes of the gas every day, but will be expandable to a potential 32 tonnes. Hydrogen production is water and electricity-intensive, requiring 75,000 litres and 17.8 megawatts respectively. Nikola is currently experimenting with using grey water to reduce its environmental impact. 

joint venture as a perfect partnership