Mark Russell may have the CV of a seasoned executive. But he's got the soul of an entrepreneur.
"This is the direction I've been trending toward in my career," said the former Worthington Industries Inc. (NYSE: WOR) president and chief operating officer, who a few weeks ago joined Phoenix-based Nikola Motor Company as the zero emissions vehicle startup's first president. "Toward the more aggressive, the more hard-charging."
Russell has been part of Nikola from the beginning. He first met Trevor Milton, Nikola's founder and CEO, when Milton's previous company, dHybrid Systems, a business that developed natural gas systems for large vehicles, became one of the biggest customers of Worthington's high pressure carbon composite division.
"It got to the point where I said: ‘Who are these guys?' I wanted to meet them," Russell said. A few months later Worthington acquired the company and later became Nikola's first strategic investor.
Russell said Nikola's corporate culture "is different in a glorious way" from Worthington's, a metals manufacturer founded in 1955. "We get so much done; it's just dizzying."
Dizzying is an apt description of Nikola, which blasted onto the zero emissions vehicle scene in 2014 and has since secured hundreds of orders – from the likes of U.S. Express and Anheuser-Busch – for its hydrogen-electric Class 8 trucks. The company's grand plans include producing 35,000 trucks annually starting in 2022, and building out a nationwide hydrogen supply chain and fueling station network.
Like other startups in the hugely competitive zero emissions vehicle space (see Tesla), Nikola occasionally trips over its ambitions. The company has received flack for seemingly abrupt shifts in strategy, announcing plans several years ago for a hybrid electric and natural gas semi-truck, then switching gears to focus on hybrid battery-electric and fuel cell hydrogen big rigs.
In February Nikola announced all-electric versions for two of its semi-truck models, a surprise move industry watchers tie to the company's arch-enemy Tesla Inc (NASDAQ: TSLA), which has an all-electric semi-truck on the market. (Nikola Motors is currently suing Tesla for $2 billion over the Tesla Semi, claiming that it copied Nikola's design).
FreightWaves spoke with Russell by telephone. During the conversation, the newly minted clean-tech executive talked about electric-hydrogen synergies, Nikola's competitive edge and how hydrogen will save the world. (Interview excerpts have been edited for length and clarity.)
FreightWaves: Nikola is known for its hydrogen fuel-cell vision. Will the battery-electric models steal the thunder?
Mark Russell: "Our vehicles have always been electric. The fuel cell is there to extend the range. That's the challenge with the battery vehicle. Trevor saw it years ago; the challenge for alternative fuel is the long-haul fuel market. So he had in his mind a hybrid version. He founded dHybrid because he believed natural gas might be part of the solution. That's before hydrogen made such incredible progress. Hydrogen fuel cells are at the the point now that we're very confident we are going to introduce a vehicle that competes with diesel in every way, including financially, and at the same time be zero emissions. That's our proposition.
FW: Hydrogen is often produced from methane, a potent source of greenhouse gas emissions.
Russell: We will not be using any hydrogen that comes from hydrocarbons. It's all electrically generated. We'll take all of our electricity from renewable sources. That's the big part of this. The trucks are fun to show. But the more important part of this is the hydrogen supply chain that we're proving out – it's about hydrogen as a way to store fuel, and balance grids and get renewables into the grids without causing problems. Because that's the problem with renewables; they only generate when the wind blows or sun shines, and what do you do with them when you don't need it? You have to store it.
One solution is to buy expensive batteries that consume commodities scarce on this planet and then have hazardous waste when they are done. Or you can make hydrogen. Once you've made hydrogen and stored it, it can sit there forever. It doesn't degrade. It doesn't leak. And when you turn it back into electricity it becomes water. It's an elegant, beautiful, simple solution for storing energy, so much better than batteries. You break down water; you put it back together.
FW: About Tesla...
Russell: "Their truck is our truck with a bigger battery, and we can easily do that. It [Nikola's recent electric vehicle announcement] is not as big a deal as people are making it out to be. It's not a strategy shift. Our model is still attacking the long haul market. We will sell battery electric vehicles based on the same design, and they'll be great vehicles for those applications. If Tesla can produce their truck and meet the specs, we'll be competing with them in that market. Tesla doesn't have anything to compete with us in long-haul.
FW: You plan to install 700 hydrogen fueling stations around the country by 2028. Give us a progress update.
Russell: "We're putting the first two non-public stations here in Phoenix, for fueling for our own purposes. For the retail, we will start on the geographies and the routes that make most sense for our customers. Internally we have very specific plans about which geographies and which customers, and they're the ones that will get the coverage first. By the time we are producing at a rate that we need nationwide coverage, we'll have a nationwide network of stations. We will also be providing dispensing equipment and everything for a station but the retail part for dedicated fleet customers.
FW: The race is on in this space and not just from startups. For example, there's the hydrogen fueled Kenworth T680 developed in collaboration with Toyota.
Russell: "We encourage anybody to be moving down this path, and in fact, we are jointly developing a fueling interface technology with everyone so you don't have the problem with electric vehicles today, where your charger doesn't work except in your company's places.
But If you saw the PACCAR-Kenworth vehicle, they took a stock Kenworth rig and removed the diesel powertrain and torque converter, put an electric motor on the axle, and they put in a battery pack and a couple of Mirai cells.
If you come to Nikola World* and take a look at those vehicles, and pay attention to what's under the hood, you're going to see a machine that is not just a Frankenstein, cobbled together from existing components. It is a from-scratch beautifully designed solution.
We want to be everyone to be engaged in this effort. But we don't see anybody that's ahead of us."
*The Nikola World exhibition vehicles will be on display April 16-17 in Phoenix.
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