This Week in Startups - E1090: Nikola Founder Trevor Milton on competing with Tesla, hydrogen over battery, going public as a pre-revenue company & more

Episode Date: July 31, 2020

Check out Nikola: https://nikolamotor.com Follow Trevor: https://twitter.com/nikolatrevor Follow Jason: https://twitter.com/jason Follow This Week in Startups: https://twitter.com/TWiStartups

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See why founders, venture capitalists, and celebrities choose Modloft. Get 15% off and free shipping at modloft.com slash ton. twist. 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, Chimoth, 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, um, freely tradable with no commissions called Robin Hood, 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 the things that we certainly should worry about and the phenomenal success of Tesla. The founder of Nicola 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 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's CEO slot, correct? Yep. 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 Nicola. 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? Yeah, I mean, it hasn't been a pretty crazy, a incredible ride getting here. We were private for, you know, for a few years. And a lot of people asked, you know, why'd you go public? Well, mainly it was because of we work. Once we work came around, they kind of, there's a big glass house.

The cracks started coming. The whole thing fell down overnight. And, you know, they wanted to, 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 that 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. When you go public, you show them everything.

They get us here, books, the money, every contract, every contract, every. related party transaction, they get to see everything. And ultimately what that is that 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. So the big problem with that is the oil companies make all the money. So we came in and we said, look, we want to take all that money from the oil companies, bring it in a Nikola.

And when you buy our truck, we cover the cost of your truck, your service, your warranty, your maintenance, and your 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 Anahezer Bush. 13 routes coming for their distribution centers 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. I'll be on. It's very difficult. But we got a lot of great things ahead of us. And that's always fun to see. Yeah, and so this is what makes it a challenging, I think, interview is because there's so much to talk about here. 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? You could not have sum that up better. Honestly, they had so much control over there that it was unhealthy. And so people even asked me, they said, 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 I didn't want that much control. It's a, it's unhealthy for an organization to have a dictator. and so what I'm the executive chairman, the CEO reports to me, but there is a very qualified great friend of mine who's a, his name's Mark Russell. He was the president of a publicly

traded company called Worthington Industries. And he's our CEO now. 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-Late. Now that's interesting as a debate, it's interesting as a debate point, I think, 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. abilities, correct? It does, but here's the difference. So in the WeWork example, they had full control of 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 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. We were in the public didn't know this. So when, 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 at one shot. And it's like, oh my gosh, this is a, 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 the board understands what it is, why it 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 are you doing?

because it becomes fatal. I mean, I think probably the self-dealing was the thing that did in. I think we work in a lot of investors' mind when he tried to say, I own the copyright and I'm going to sell the copyright because, surprise, you 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.

So to summarize your point, maybe it's good to have some level of control, you know, maybe dictatorship control, but with some sunlight is maybe the ultimate model. Yeah. Yeah, that's how it was with like Facebook. I mean, look, Mark controls Facebook, but he has a really good brilliant team around and that balances him. And there was never that over there. And that's what I've done here in Nicholas.

We built his 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 years in, 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 a 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 until 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 a 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 brand new model that no one's ever really done before until now.

Yeah, I mean, the retail investors getting involved early, they're all looking for something that 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 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? What's been the most difficult part for you? I'm trying, you know, the hard part is my generation

and the generation that came after me is very 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 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 got to allow a company time to execute their vision or they're going to make bad decisions. And it's not about that you got to 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 to blend. You want the, you want the Robin Hoods, but you also have to educate him to become more like Warren Buffett or others.

No, he's not that, 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 that instant gratification is not healthy. Yeah. Yeah, it's great that people are dabbling in the market and getting educated. But eventually what they'll learn is if some companies a winner, you want to hodel 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 when we get back on this week in Starlips?

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And they're going to give you the first $50 for free at LinkedIn.com slash twist. Terms and conditions apply. And those terms and conditions apply because they're giving you $50 at LinkedIn.com slash twist. All right, everybody, welcome back to this weekend startup. It's really excited to have a very fascinating cat, Trevor Milton, on the podcast. 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 Robin Hood, 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 andcom.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 line 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 turnover cards. And we hope that we hope that. hope to turn over some cards here and understand Trevor's actual mission, understand 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. Why would you jump off the battery train and go on hydrogen? I don't understand. 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 have, we do build these big semi-trucks and they're either hydrogen or battery electric. And there are 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 needed 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 at full gross weight. Wait, why is that? 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?

Explain that to me. I don't understand truck. Exactly. So trucks have a cap on weight 80,000 pounds. So if your truck weighs, let's say 20,000 pounds, that means you have 60,000 pounds and in essentially freight you can move with the trailer, right? Got it. 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. So you're losing 50 cents a pound, essentially. Yeah, 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 is weight-sensitive loads, long-range, what we call over-the-road freight. So that's moving stuff from state to stay. 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 filled 50 percent, or if you're transporting cars, maybe they only take up 50 percent of the volume.

but something that could fill a complete volume would be beer or food or milk or something, correct? Exactly. There's two things that they call 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 30 pounds lighter than capacity anyways or 30,000 pounds and no one cares. Battery makes a lot of sense for that. Got it. But when you start putting heavy loads like drinks like Analyzer Bush or beer or food 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 until we really changed the whole thing, hydrogen would have never worked. It was too expensive. We started at $16 a kilogram, which is like five times more than you would with, or three, whatever, three to five times. How far does a kilogram drive a truck? Eight miles. And what would that drive like a normal car, like five times that or ten times? No, a normal car, a kilogram will give you like 40 miles. Got it. So a kilogram, six, $16, $8 miles is $2 a mile. Yeah, crazy.

Your own bankrupt. Yeah. So now what we did is we've been able to drive hydrogen down to under $4 a kilogram. We're about $3 a kilogram on hydrogen now. So all of a sudden those economics now makes sense. You're cheaper than diesel. You know, you're down below that 30 cent per mile mark on fuel. So now it makes total sense to drive hydrogen.

And hydrogen is zero emission. How did you do that? How did you get from 14 to 3? Is there some special sauce there? Yeah, very simple. It's all about standardization. So it's like a phone, right? When Apple makes a phone, they'll make $25 million or $100 million of the same thing.

Yeah. So in America right now, there's no two hydrogen stations that were actually developed on the same platform. 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 developed a first ever standard hydrogen station that can be produced in the thousands. And that's the key is you just drive the cost down. 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 now?

A big one, yeah. So a huge station for semi-trucks, it would be 50. Now we've got it down below 15. So this is the equivalent in the Tesla operating system or the Tesla world of the Supercharger Network, correct? Yeah, very similar to that. But we don't ever build on speculation. So Tesla goes out and puts these chargers all over the place for everybody.

We don't. So NICO, what we do is we sell the customers that go to point A to point B every single day, and they go back and forth. Like a standard route. So that's what the Anheiser. Bush deal is. 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 24-7 on that route every single day. And that's all the money is. And so that $800 million deal, how is that stage? Have they paid you any of that?

It's a letter of intent. I'm just curious the nature of that. Why are they, it's in contract? Yeah, 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. We cover all the hydrogen costs. We cover everything. And they pay about about a dollar a mile. And that's how we make our money. And so here's the way it works. When Peterbilt sells a truck, they're going to make $15,000 in profit on that truck. When Nicholas sells a truck, we can make almost a quarter million a profit per truck.

That means they have to sell 20 times somewhere around there. We make 20 times more money per truck we sell than Peter built us than our competition. And that's because we own the hydrogen. We own the oil. But it's not real oil. It's zero emission fuel. And that's the key to hydrogen is you own the network. work. And hydrogen, the tanks empty and you don't have the weight. So that's the reason why you have

this big advantage on the volume, the sort of max load routes. 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 a 60 kilograms is more energy than, then 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. Why has hydrogen not taken off in the United States then? I'm curious. It's too expensive. It's just too expensive. Yeah, but we've driven that down now. So now you see the whole world's talking about hydrogen now because of equal. Like three years ago, you couldn't even talk about hydrogen. Now it's the talk of everything around the world. Europe's, you know,

spending hundreds of billions on it. Everyone is now. So the rest of the world tried to figure out hydrogen power cars and trucks. They couldn't figure it out. And then you guys came along and you figured it out. Exactly, because cars are a terrible idea a lot of times with hydrogen. They pick the wrong market. These guys are, I mean, it's insane. 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, 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's 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 is 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 their own market to go after it's stupid makes sense and so also i you guys are making direct when you do the routes, you're pre-selling the route, so you don't have to incur the cost of building this route, let's say it was from Arizona to Texas or something, just making something

up here. But you're based in Arizona. So betting man would say if you do get this Anheiser-Busch thing up and running, would be in that southwest category, am I correct? Or that region? Yeah, we have, there's two or three routes they have in this western area, and we're definitely going to focus on those for sure right away. And so those repeated routes, derives.

because you don't have to take on the CAP-X structure without a customer. So previously, the people making the hydrogen cells, trucks, and making the stations were all different people. Nobody had the ability to build it, and then people would come, and then people would actually. Exactly. Well, this is a difference of us, everyone else. 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 never came to fill out of them. And so they were just like built these things hoping people would come. Nikola's 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 that's 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 of 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.

Letters are a great. These are people who want to have. And why do those truck, what are 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 the future and they want to invest in it or is it cost? No, real quick, I want to correct something. They're not letter-intents. They're actually contracts.

Contracts, got it. Yeah, billions and billions of dollars with the contracts. 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 any contract you do in life. Right. If they even order a Peterbilt, they can still back out of business.

Peterbilt doesn't give them a truck. And those folks who are buying those would not go through the time to sign them if they did not have the intent. Exactly. I mean, these are big companies. They want to be, they're actually planning right now. Like we have calls with Anizer Bush on a monthly basis where we're talking about, okay, when's the delivery?

What days are these trucks coming in? When's a hydrogen station going in? When's a 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 damage. Why do they have to, oh, they have to phase it out for environmental reasons that vary by state in the United States, correct?

Yeah, those, well, this is because of lease cycles. So they have a, they have like a three-year lease cycle on a truck or whatever, and they have to phase out those diesles 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. 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 at startups? Okay, if you don't have your SOC2 compliance buttoned up, you can't close major enterprise customers. It's really that simple. And if you already have your SOC2 report, don't you want to make it easier to maintain it year after year? Well, Vantas compliance software makes it easier to get and renew your SOC2. Their software continuously tests against technical and non-technical SOC2 requirements and they partner with over two dozen audit firms who have

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slash twist. That's Vanta, V-A-N-T-A-com slash twist, for I kid you not, $1,000 off. Thanks to Vanta for supporting independent media like this weekend startups. Let's get back to this amazing program. Okay, Trevor Milton's on the podcast, being super honest and upfront about his company, Nicola 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're 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 starts to sound a little more reasonable, perhaps not a 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? No, because we actually build both right now. So we actually have the first ever battery electric truck come into market beating Tesla. So we have a 720 kilowatt hour battery truck coming to market at the middle day 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. And the reason you're able to beat them is because you've taken the OEM partnership route. You're not actually building the trucks yourself. You're doing it with a partner who's built trucks already.

Exactly. I've actually been asked in the past. 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. Do you think? He's really smart in a lot of areas. So you give that to Elon, you can see that he's smart. Yeah, I mean, he's in some areas. He's ballsy, you know, he's got a lot of guts and he's willing to put his money where his mouth is. And so I get him. I get it. Here's the thing. There's two things I think that he should have done. He should have worked with dealerships, first of all, 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 OEMs? Yeah, I was going to get back to the service though. But if you think about the manufacturer, I was 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 himself all of his manufacturing problems 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

and we don't think it's smart to actually unown the flight or to build the trucks ourselves. We want a partner to help us. So we win, we partnered with Yveco. They're the fifth largest truck OEM in the world. They have 50 years, five decades of heavy duty trucking experience in cold weather, Arctic weather, heavy duty roads. And all over Europe, they are, 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 we have no technology.

And we said, well, that's good because we have the best power train technology in the world, we think, but we have no expertise in the truck chassis world. And so we partnered up with EVECO and they spent four years and billions of dollars building a brand new truck platform. And in Europe, all the trucks are the same. So a battery electric truck's identical to a diesel truck in Europe. It's they have to be because 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. It's got 720 kilowatt hours of battery. And it's, it goes over. 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 cities, battery kicks hydrogen's butt within the city a lot of times, almost every time. But as soon as you get on the freeway, that's where hydrogen makes said. So we do both of them. And you're going to, when people are signing these deals with you, are they saying, hey, how do you compete with Tesla? Is Tesla going to just sell the trucks to them, do you think? Or I think Tesla will do this, you know, we'll just charge you by mile approach? Because that seems like a pretty clever business approach. I'll give you credit to that.

They're going to change to exactly what we did. So 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 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 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. But you've got a relative. small company, about 400 employees. So you're not doing the manufacturing. You've outsourced that. So what do the 400 people at Nicola do? What is the speciality that you are focusing on? 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 people here are focused on, like what we call them specialty engineers? They're all about the advanced technologies of the company, whether it's software, hardware, inverters, E-axles, batteries, battery management systems, controls, all that stuff, right? So what we do is we take that once we build a prototype, then we send it out to someone like an E-axle you can do someone like, you know, Bort Warner Z-F or whatever, Z-F, they call it Z-F.

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. 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 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. that 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 lose control. That 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. 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 for stability. But hundreds of millions of cars have been built by third party suppliers with these different parts. Remember, the tech is ours. So the battery, like all the important stuff like software batteries or, or Eaxel designs, it just means

we use someone else to build them in the thousands for us, but we own all the tech. Yeah. And that's, to us allows us to not have to have 50,000 employees. Right. And then let's talk about self-driving. That's obviously coming, and it's going to be coming in the midterm, 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 crews or you pick Waymo? you just say, hey, can we license your technology, which is what Waymo wants to do anyway? Absolutely.

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

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 bring it in from a supplier. It's like glass on a window. Why do your own glass?

That's insane. Just buy someone's glass window. I mean, I guess 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 ten million of these a year. There you go. You expect to produce five or ten thousand a year or something. It's all about quantity, and that's a problem with trucking. You don't have the quantity you have an automotive in. 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 just a totally different world. And now did you pick the name Nikola five years ago because Tesla existed and you thought that would be like interesting? How did you come to the brand name? Because people are like, well, that's kind of close to Tesla.

Yeah. How did you come to the name, the company when there was another company with the last name of the inventor? Yeah, I didn't name it after it because that would be a very prick move to do. That's not me. I'm kind of asking for that reason because it felt a little bit trolley to. Yeah, 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.

I'm a true inventor. I'm a creator. I started five companies in my life. 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 us for doing that, it's all a pride thing. It has nothing to do with it. Like, no one is. Marking is everything. 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. I mean, 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? It's kind of like a photo bomb. I guess there's a cynical way to describe it. I guess there's probably some good that can come from up, but there's also been a lot of bad. 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 been, 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 eyepace to try it out. And it's a first time in five years. How much better is the Tesla than the Jaguar? Software-wise Tesla destroys Jaguar. Quality-wise, Jaguar destroys Tesla. 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 that Tesla car because of the software and how easy it is to use. But I, and I despise Jaguar with their software.

It's a monstrosity of problems. And nothing works. But so I love what Tesla's 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.

You have to wait. It has to think about it. It has to refine where the car is. It's like 15 minutes to turn your AC on. Sometimes you can't even do it if a windows open. Right. Why does it, why do you care if a window is open? Let me start my damn car.

Yeah. You know, and it's like this total mess, right? And you get on a test one. 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 and close the app. It's like three. easy three steps. 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. They've actually thought this through.

I have given so many compliments to what they've done in the world that it's definitely incredible what they've done. And you're going to do some consumer cars as well, correct? We only one. We have the Neclob Badger, which is, well, I shouldn't say only one. We have the Nikola Badger, which is an electric pickup truck. I want to know why you decide. 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 and startups? Hey, everybody, do you like modern furniture? I do. And I am in love with a company called Mobloft. You may have heard of them. They make gorgeous, really well-built, elegant, but affordable modern furnishings. And I have one of their beautiful tables in my house.

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candidly. I love the products. Okay, let's get back to this amazing episode. All right, we're chopping it up with Trevor Milton, the executive chair and founder of Nicola 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, $800,000. Is that correct? Yep, $700, yep. Or $700. 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. Yeah, we just got another $260 million this week from it. So that means you have a billion dollar war chest. We do. We have almost a billion dollars in our account right now. Amazing. And only 500 employees. So that means you're really only spending on employees, 10 million a month or something, I would guess, something in that range? It's really low, and that's what the advantage is.

That's why we did it that way. So now you've got all this cash on the balance sheet and you've got all this runway. But you, this 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 Rivan? Rivan, Rivan 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. Why would you take on more work? That's a good question. So here's the reason why.

Our trucks are a gravy train with money. That's where all the money comes from is our big semi-trucks, right? The problem 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 over, say, 10 or 15 years. And if you're limited in yourself to 10% of, in 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, you know, 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. 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 trucks for the consumer. And the consumer is the one who is part of the Robin Hood portfolio, is part of the, family office or whatever. And that's where all the valuation the company comes from. Are you saying you're going to do it profitably or that it's a loss leader or a break?

It's profitable. You tend to be profit with it. What will that retail for? Have you announced the pricing and the launch date of that? 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. So we'll be in production at the end of next year. 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? That's not been to announce yet, but it'll be coming out soon. That's probably one of the biggest announcements that the entire investment community wants to know about Nikola. And that hits very soon. Okay. 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. And it's going to be hydrogen or is it going to be bad? Both. You can order either way. You can choose battery or hydrogen. But with hydrogen, how would you fill the tank if you have yet to build the network? 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.

Why would somebody buy the hydrogen? Because it seems like we said earlier, that battery kicks hydrogen's ass, in low load situations. If we take that as a given, 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. What even what is that market?

No, about 30 to 40% 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 go into job sites or those trying to power a job site or those hauling big loads and that's what it's for on the that's what it was made

for for the hydrogen version and so you will on the hydrogen side, is there a hydrogen pickup truck out there today? No, we're the first one. 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 Rivian and the cyber truck eventually on that side. But you're not going to be building it yourself. You're going to be putting your innards, your drive train, your batteries, etc.

But I assume you're not making your battery packs either, right? That's your lightweight. No, we do. You do make your own battery packs. We do make your own battery packs. That's a key element because of the cost. the battery packs 30% of your vehicles 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 build. But another manufacturer is going to actually be spitting it out on their assembly line. So you're going to be in the battery business. You're going to build battery packs. 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.

What do you think Tesla is going to announce with this 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, uh, down. What do you think it's going to be? Yeah, I think you're going to be cost material type, you know, uh, things like that.

But I think, uh, you know, he's, you know, it's tough, do. Like I, I get, I get where they come from, but they've, there's a, I, I, I really hope that 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, and, 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 pace Panasonic to do that. Like, why try to, you don't see. I think they want. I think the reason they would be doing it is because they think they can do it better and

that if they do 10. different things concurrently 10, 20% better, they change the world? They can. The complexity is that you can't focus. And I, that's, that's okay. But I mean, you know, look, it's, 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 as, is we have a lot going on as well. But heaven, I mean, there's no money in batteries. They pay 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?

And if you build it yourself, you're going to be a, you might be 10 or 20% cheaper than that, but then you got the CAPX that's going to cost 30%. So it's a net loss of 10% to do it yourself. Unless you have a thesis that you can continue at a faster pace to lower the price, and that could make the difference, right? It is true, 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, there are certain things I do in house, doing sales. We've, so perfect example. 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 and the Tesla is the same one 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 you the Tesla energy pack where you get the car, the solar panels, and the wall unit, right? The power wall. Yeah. No, they've done some cool stuff, man. I mean, I love what they've, I love what they've done. I just, there's so many things that are like, you know, you only have so many hours in the day, right? 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 like monumental change. I don't like incremental change. Tesla's not doing that you think they should do. What's the number one thing? Oh, man. Well, I don't want to get it.

give some of that away. But I think I think Elon ought to seriously focus on aviation is my opinion. Really? Like vetoes? Yeah, I think he ought to focus on aviation. That's my opinion, because that's that's one of the biggest polluters in the world. It's one that needs a lot of battery tech. And it's one that has a lot of money involved with it because you're transporting people. I think he needs to come up with vitals that are moving containers. I would invite, you know, if he was asking me, you know, I'm sure what 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 it goes into- VToles of containers out. So instead of putting them on truck, you just actually lift them out.

It's going to be- Over the mountains, right? Right up to a distribution network thing is moved by a truck after that. Yeah. So it's like a 15-mile trip. That's it. 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 L.A. It moves it up to right 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.

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. I mean, that's the stuff I love, man. Solve a big problem. You know, a 5% or 10% incremental change on a battery is a big deal, but they're doing that anyways right now. I'm curious where you came.

from and how you got to hear because you know we got 44 minutes into the podcast I think we under this we understand the strategy the product what you're doing 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 well outcome it would have been my previous one which was dehybrid systems where we built hydrogen and natural gas storage so I came from the heavy duty industry already understanding heavy duty trucks, storage, how to store energy. That's, that one I sold the Worthington Industries.

And, but then, you know, I'd say that the most successful one I ever had was actually my biggest company. How did that, how big did that get? The storage one that worth it? We did a few million revenue. Our first year, second year was 13 million. We're on track for 50 million the year after. That's when we sold to Worthington Industries. And Worthington is also your partner in Rivian, right? I'm sorry, on Nicola. And Nicola, yes. They had a stake in the company. They actually had a zero basis and they've made over a billion dollars from my investment. And so, and then before that, you said you had another company that did even better. Yeah.

So, well, no, actually my biggest failure was my biggest success in my opinion. That's where I differentiate you. It's coming called Upillar.com. It was, we did online e-commerce. It was very similar to Amazon. We built the first shopping card out there that I know. There might, I don't know of anyone before it, but what that shopping card did is allow you to buy like 20 items from 20 different people.

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. And then obviously Amazon grew and it became incredible and they kicked our button. But we just couldn't handle the growth. That was like my biggest learning experiences were at UPillar where I made a ton of mistakes in my life and it made me who I am today. What did you, if you were to look back on that time, top two or three mistakes that you fix now in your mind? I tried to scale too quickly. That was a big problem of mine. Like we are, we are spread out thin. So 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, 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. instead I tried to just go more the whole country route type of thing and and I really heard us. The second one 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. I should have been in, if I was in Silicon Valley, I would have probably raised five or ten billion dollars if I wanted to. Because we're growing. We had 80 million people come on our site. I mean, we're insane, gross. 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 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 giving you the high ground to actually execute on an ambitious plan. So when did, what is the background on? Who's the maniac who decided to take this company and say,

let's spack it? Because that seemed like the bold move of bold moves. It was a, look, innovators always get criticized until they prove them rights. Sure. That's what I'm saying.

I'm framing it as bold, by the way. I didn't frame it as crazy. I framed it as bold. Now, you, I'm actually given a compliment here to Tesla, to Elon, because every time he does sign, 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.

But what happens is like a year prior to going public, I told my board, we're going to 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 we work 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 how do we do this how do we raise money in this in this industry where unicorns are

criticized so I I we were dealing with Cowan and Morgan Stanley and they they brought a person to us He said, hey, there's this guy who's a former head of General Motors. He's got an enormous amount of background. He's running a SPAC. He can help you raise $700 million guaranteed. Would you meet with him? And I said, you know, I said, sure. So Steve Gerski, a guy named Steve Gerski came out to visit us.

And he brought us 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 Ninklob truck was real, that everything was real with it. The suppliers real, the partnerships were real. They did all the due diligence. and they had a $235 million SPAC, a special acquisition company, and then 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 going public, and that has been monumental because now we got a, you know, we have that plus a warrants, which gave us a billion dollars of cash reserves. And today a billion doesn't sound like a lot. No, it's a lot. But it's a lot of money. It's a ton of money 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. This billion dollars is going to last you two, three, four years. Will it take you to profitability? Are you going to have to keep going back to the market and sell more shares? It'll be a couple of years. I mean, it took, you know, most of our competitors are in it over $20 billion, to $20, $25 billion. 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 bring in more money. We love to have good cash reserves. but the nice thing about our, I'll tell you a phrase I tell everybody. And this is one of my favorite phrases. I says, you cannot be environmentally sustainable if you're not financially sustainable. So 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 Nicola was a very sustainable financial model and also an environmentally sustainable model. And that's where I think the greatest valuations are going to come from in the future. Yeah. And so the SPAC puts the money in. You have a pipe, a private investment in a public entity that occurs at the same time. But then you sell 70 million dollars in shares at that same time. Is that correct? Yep. Yeah. 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 even launched that? That was a red flag of red flag. for me and for others.

Yeah, there's a lot of people have asked me that and criticize me. And here's the real answer to it. When we did, when we were going through this, the pipe put in all their money at $10, you know, at the $10 share price essentially, which is the pre-IPO price for everybody. The SPAC put in the thing at $10 as well. And the pipe, these big funds like Fidelity, P-SAM, you know, all these different groups that were in that are in here, Black Rock, all these other groups, they can, came in, they said, look, you got too much control, way too much. You own the board. You own,

what was your ownership at that point percentage wise, ballpark? Well, I gave up a lot. So I had 70% of the company and I gave about 30 to my employees. 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. I want to share it with, I want to share it with people that are to have a 30% employee stock option pool. Well, I gave away probably about 15% directly and then the other 15% through the option. So it was over 30% of my stock was deluded. It was taken off 30% of the top to those guys. And I still had 40% of the company.

Yeah. And I'll make, you know, hundreds of people wealthy and 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've got to choose one or the other. And I asked them 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. And I've always done everything where everything I've ever done with the board has always been 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 won't do something if even one of my guys objects to it. I want to find out why. And if I can't commence 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 one dollar salary. And, and also the whole executive team. This is what's not, this is what no one ever reported on. All they did is report on the bad, right? Because it gets headlines. So the entire executive team came in and said, okay, we're going to take one dollar salary. And that's, and we get stock bonuses. That's it. and they said, Trevor, we want you to reduce down some of that control. 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. It's 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 offered to buy as part of that deal. They offered to buy $70 million of my shares at the exact same rate they paid for everything else. Yeah, no, there wasn't anything nefarious of it. just the, except the signal of, oh, he's selling his shares, but it wound up being 7% of the total proceeds or ballpark of that, of this whole thing. So it's not like it's outrageous. It is

life-changing money. Certainly. It's not, it's not chump change. Yeah. But you're still have 30% of the company or something to that effect? Yeah, I'm actually buying more right now. So that we, we, I made a, you know, I put this out there so everyone would know so I wouldn't get sued. 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, you own 30% of the company now? About, yeah, somewhere slightly below the 30% mark. And my goal is to get up to, my goal is to try to over time is to buy up to about 35%.

Got it. So you sold some, but now you've got conviction again and you're buying again. Well, I've always had conviction, but the difference is now is that I've got, 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. Yeah. every investor. 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 on it. Diversification is a cornerstone of any wealth accumulation strategy for sure. And you make better business decisions when you're not tied on money. But you're taking loans against your equity holdings to buy more equity. That's considered a very high risk behavior, isn't it? Like, that's taking margin. No, very small amount.

We're talking 16%. 16% and so it would have to collapse by over 80 for me even be affected and I've got money to buy those out if it collapse 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 nice nest egg right but I've already got my house paid for I got my things paid for like I'm okay to take that risk I believe in the company it's all right what what do you need to prove this year to convince the naysayers what do you think in the next year or two you need to prove the business model out and also to, you know, sort of satisfy the naysayers out there.

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 that OEM that comes in and works with us on the Badgers or where we're not out billions at all trying to build a car that everyone else was losing money on. Got it. So if that comes out and it's like a Toyota or it's like somebody who's built a lot of trucks, you're going to look or Jeep or something or I don't know who's. a big truck builder.

You're going to look, that's going to help validate, correct? You're going to look really good. Got it. If that happens, which we believe it will from where we're at right now. If that happens,

then I would, I would, I cannot give me one advice on where it's going to go, but I'd see our, I'd see our company value. To be clear, it's not, it's not close.

The deal isn't closed. You're working on it. We have three offers on the table right now and all we have to do is signed paperwork. So we're trying to validate which one is the best one for us. Oh, that's good. So,

yeah. 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. So we've got three term sheets right now on my desk that are essentially ready to be signed. So getting that Badger out or getting the announcement about who's going to build the Badger for you. That's a big one. That's the big one.

Okay. Well, that's one of them. The other one is getting the first ever battery electric semi-truck on the road being tested. like be ahead of Tesla ahead of everybody. This is like the production, you know, really real production version is not a prototype. And those come out in the next, 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, it's game over DeKla is going to be where, you know,

it's on the trajectory of where our competitor is. that being Tesla, $250 billion, $25X where you are currently today. When those trucks come out, they already have a buyer has already bought them, or you'll just use them and use them to sell more trucks? No, those five are the hardcore testing ones where you have them in the hands of fleets and your team and other fleets. So this is where people can actually get in and drive them with loads and it's safe. Got it.

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 safe to put in someone else's hands because there's a lot of, it's a very like, it's a very advanced prototype, but it's not made to just hand over to someone. So these are actually made to where you can let someone just jump in and drive them. Got it. What are the chances that, oh, is there anything else on that? Yeah, the third one is the third one's Nikola World.

So at Niga World is December 3rd, 4th, and 5th when we have Velda Badger, we show off all of our other product lines. That's where people get to see the Badger become real for the first time. So a lot of people have said that our pickup truck is fake. It doesn't exist. And it's real. It takes two years to build a prototype like that. That advance it fully works.

So 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 beautiful. It's done. It's gorgeous.

And so we've... 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. You're just putting your intelligence into it. That's part of it, but it's actually our chassis that they're going to help us commercialize it. So what we did is we did like the first 50% of it. And then they came in, they said, hey, you know what?

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. Here's a silly question, perhaps, or maybe deadly serious. You took money from OEMs who invested in the company, right, some number of truck companies and other folks, battery companies, sell companies, I believe other folks invested. Are you worth more in terms of a market cap than them in this crazy stock, you know, days? Yeah, we are. So like Worthington, Worthington invested in us and there were three or four

billion or three or four times them and they got a billion dollar 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. But I would see in the next year, I'd see the ability for us to be worth more in Bosch. So, Worthington was the truck company. You said, is that the name? No, Worthington is a metal company.

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? You could, but they got the legacy of diesel, and I don't want to ever be associated with building diesel trucks. Got it. All right, that makes sense.

And then when, if you were to guess, when the United States tips over, and we have less diesel trucks and more, you know, battery and hydrogen trucks. What year will that happen? Are you talking about being sold or actually on the road? I'd say on the road in use. Yeah.

Okay. On the road, 10 years. Sold, probably three. Got it. So in three. Because it takes, usually people buy three to six years in advance. So because of those lease cycles. So we're,

it's about time everyone places all their orders, which are coming down the line right now. 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 10 years, but sold within probably half that time. 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, because these things get beat to all hell, right? They're usually seven years.

They go through two leases, usually two leases of three years apiece. So in 20 years, is it conceivable that we just won't have diesel trucks anymore? You'll have some still, but I would say it's going to be damn hard to ever buy a diesel after it. And within three years from now, almost no fleets will ever touch a diesel again. I'm talking about buying, buying new diesels. 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. What are the chances that Tesla's semi-truck goes with swapping the battery packs? Because I remember in the early days, Tesla showed the Model S swapping the battery packs at stations, and that was potentially going to be a thing. But I think supercharging just took away the need for that. idea was you would pull into your, you know, on the way to Tahoe, you'd 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 today or going to Vegas or whatever. But just seemed totally unnecessary. So, but with the trucks, you know, if you have three of those, 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? Yeah, it's a big problem, actually. Here's the reason why. If you take that a Tesla's battery cell cost right now at a buck 75,

their total cost of a complete battery to do the range they talk about, their three to 500 mile range, would be between $110 and $125,000 with the battery housing including. So for every truck you build, you're 125,000 on the battery, and then you have to have another 125,000 battery on the side just waiting for it. That's never fully utilized. It 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. So we've already ran all the numbers. This is actually why I was explaining to people why you can't do battery buffering for semi-trucks on the grid.

Because for every truck you have that's a megawatt hour of energy, you've got to have 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. And you've essentially, you know, now your truck is costing more than a hydrogen truck. All right. Well, it's going to be an incredible couple of years, and we'll be watching and hopefully have you on in exactly a year. I asked my team to put a,

or maybe actually after the pickup truck, we could talk a little bit. You know what? Come right after Nicola World. That'll be, we ought to get you out to Nicola World. You ought to come to that event. Where is that going to be, Arizona? Here in Phoenix, Arizona, and it is going to be a rock star event, I promise you that you will not want to miss.

All right. Well, there you have it, folks. Trevor Milton from Niccolo Motors. A lot of you've asked Adam on the pod, and here he is. He's on the pod. Good luck with everything. And I appreciate it. Good and bad. Thank you. I love it all. Cheers. Bye.