Nikola may not have much revenue yet, but the order book for the maker of battery- and hydrogen-powered commercial vehicles keeps getting heavier. Waste removal company Republic RSG +1.2% Services wants 2,500 electric refuse trucks from the upstart manufacturer and deliveries to start in three years.
The work vehicles are a variation of the Nikola Tre battery semi, which goes into production in Germany around the end of this year with assembly partner Iveco. Units for Republic will be built at Nikola’s U.S. factory that’s under construction in Coolidge, Arizona. The zero-emission vehicles will offer more than 150 miles of range and handle up to 1200 cans per charge, Phoenix-based Nikola said.
The order is the biggest to date for electric trash trucks in the U.S., and Republic has an option to expand it to up to 5,000 vehicles, Nikola said. The contract eventually may be worth $1 billion to $2 billion, Nikola founder and Executive Chairman Trevor Milton said in a conference call. A traditional refuse truck with a diesel or natural gas engine typically costs about $500,000, he said, declining to provide a specific price for the Nikola model.
“The refuse market is one of the most stable markets in the industry and provides long-term shareholder value,” Milton said.
“The Nikola Tre powertrain is ideal for the refuse market as it shares and uses the same batteries, controls, inverters and e-axle. By sharing the Tre platform, we can drive the cost down for both programs by using the same parts.”
Prior to the announcement, Nikola said it had more than 14,000 orders for hydrogen fuel cell trucks. Beer brewer Anheuser-Busch is awaiting hundreds of those vehicles that go into production in Arizona in 2023. The company, which listed its shares on Nasdaq NDAQ +1% in June, this month said it had an $86.6 million net loss for the quarter that ended June 30. Nikola doesn’t predict meaningful sales of battery and hydrogen-powered semi-trucks for at least two years.
“We’re pro-electrification,” Republic Services President Jon Vander Ark said in a conference call. His company is the second-largest U.S. recycling and waste hauler and buys about 20% of all refuse trucks sold annually. “I have no doubt over time the entire industry is going to get there.”
Early batches of the trucks will likely go to California and Arizona first, due to state incentives and customer demand, Vander Ark said. Republic isn’t putting down deposits for the trucks. “We certainly would have. They didn’t need our money,” he said.
On-road tests of the Nikola refuse trucks start in 2022, with deliveries for Republic getting underway in 2023. The vehicle’s batteries will hold up 720kWh of electricity and be equipped with automated side and front-end loaders. Republic is assisting in the design, Nikola said.
Along with waste trucks and semis, Nikola intends to sell electric all-terrain vehicles and jetskis and is preparing to announce a manufacturing partner for its Badger battery- and hydrogen-powered pickup.Nikola shares jumped nearly 18% to close at $43.18 in Nasdaq trading on Monday.