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CNH Industrial Takes $250 Million Lead In Nikola's Series D Round

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CNH Industrial N.V. (NYSE: CNHI) is investing $250 million in fuel cell heavy-duty trucking startup Nikola Corp., lending credence to Nikola's pledge to commercially produce hydrogen-powered fuel cell Class 8 trucks by the end of 2022.

London-based CNH Industrial is leading the Series D funding round announced Tuesday, September 3. Nikola said it expects to raise more than $1 billion on top of $254 million raised in two previous rounds. Before the new investment, Nikola was valued at $3 billion. 

"Few will doubt our ability to commercialize a truck now," Nikola CEO Trevor Milton said. A Nikola spokeswoman declined to name any other Series D investors.

Phoenix, Arizona-based Nikola showed three hydrogen-powered Class 8 models in April: the Nikola ONE Class 8 sleeper truck; the Nikola TWO Class 8 day-cab; and the Nikola TRE, a European compliant cab-over heavy-duty truck. All of Nikola's trucks can be configured to run on battery-electric power.

Nikola plans an all-in lease rate including the truck, service, maintenance and fuel costs it predicts will come in below the total cost of ownership for industry-dominant diesel trucks. It has 14,000 pre-orders for its semi-trucks.

"It obviously gives Nikola the chance to truly succeed, or prove that its idea isn't ready for prime time," said Mike Ramsey, senior research director for Automotive and Smart Mobility at Gartner Inc.

CNHI and other Series D investors and partners will receive about 25 percent ownership in Nikola.

IVECO and FPT Industrial will lend engineering and manufacturing expertise to industrialize Nikola's fuel-cell and battery-electric trucks. 

In turn, Nikola will share technologies for a European joint venture with CNH Industrial. That includes fuel-cell expertise, e-axles, inverters, independent suspension, on-board hydrogen fuel storage, over-the-air software update functionality, infotainment, vehicle controls, vehicle-to-station communication protocols, power electronics, and access to a hydrogen fueling network.

Many of those technologies come from Nikola suppliers including Robert Bosch and Wabco Holdings Inc.   

For FPT an IVECO, the move into fuel cells extends work in creating an infrastructure for liquefied natural gas (LNG)-powered engines. It builds on existing refueling networks and enables local on-site production of hydrogen. 

FPT Industrial has produced more than 40,000 natural gas-powered engines to date. IVECO has built 28,000 trucks and buses powered by FPT Industrial engines. 

Nikola plans a North American network of hydrogen fueling stations and refueling infrastructure in Europe.

The CNH Industrials-Nikola partnership focuses on getting the Nikola Two into production by the fourth quarter of 2022 for North America and integrating IVECO S-Way truck technology into the battery-electric powered Nikola TRE cabover for North America and Europe.

"The increasing focus on the recognition that there needs to be fundamental reductions in automotive emissions is driving our industry to rapidly seek advanced technological solutions," said Hubertus Mühlhäuser, CNH Industrials chief executive officer.

Nikola needed a European partner to get to market in a timely fashion, Milton said. 

"By bringing CNH Industrial on board, we now have access to manufacturing know-how, purchasing power, validated truck parts, plant engineering and much more," he said.

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