The Truth about Nikola
This video was made possible by curiosity, stream, sign up for the nebula bundle deal for just fifteen dollars, at, curiositystream.com. Forward slash, real engineering. To watch our new documentary. About the logistics, of fuel supply, during d-day. In recent months a rivalry, has emerged, in the electric, vehicle, market. A truck company, with a strangely, derivative, name, nicola. Entered the stock market. Quickly, surging to an astounding, market cap, of nearly 30 billion dollars. Looking around the internet. The sentiment, about nikola. At least among tesla, fans. Seems to be that nicola, is a scam. Nikola, is trying to be tesla. Trevor milton, is a discount, elon musk. But, while people are busy comparing, nicola, to tesla. Many are missing, nicholas, true, market potential. While their stock price, is partly, fueled by pre-orders, for the badger battery, electric, pickup truck. Something that could, directly, compete, with tesla. I'm not going to talk about this. It's just another company, using pre-orders. For a vehicle. That is, nowhere near production, ready, to fuel hype for the company's, stock. In that regard, tesla, and nicola, are pulling from the same playbook. It's not interesting. It's not unique, it's another electric, truck. Other startups, have tried, and failed, to compete, in the electric, battery vehicle market, with no other angle. What i do find interesting, about nikola. And what will, in my opinion. Ultimately. Determine, its success. Is its hydrogen. Fuel cell trucks. And this is what we're going to focus on in this video. Hydrogen. As a fuel, has a lot of potential. But, has some major hurdles to overcome. Before, it can enter the market. Hydrogen's, two, biggest challenges, to overcome. Is the price of production. Of the fuel itself. And the lack of a distribution. Network. We will cover these two challenges. Later, in the video, but for now, let's focus on hydrogen, strength. Its specific, energy. Tesla's, average battery, has a specific, energy, that's the energy, available, in every kilogram, of battery. Of 250. Watt hours per kilogram. Hydrogen. Dominates, that figure, with an astounding. 40, 000 watt hours per kilogram. There is no competition. Between the two. Hydrogen, wins. This is an impressive, advantage, alone. But now, factor in the fact, that battery vehicles, do not get lighter, as they expend, their energy, the battery, is practically, the exact same weight whether it's fully charged, or completely drained. This means the vehicle is hauling, dead weight, as the batteries, lose their charge. This is not true for hydrogen-powered. Vehicles. Which can exhaust the weight of their fuel, to the atmosphere. In the form of harmless, water vapor. As it gets used. These two factors, make hydrogen. An extremely. Attractive, grain fuel, for the transportation. Industry. Let's graph the weight of a vehicle, as we increase, its max range. As we increase the range of a battery vehicle. The weight curves, upwards. Whereas the hydrogen, vehicle, remains. Relatively, flat. Now, factor in the trucks, are limited in weight, to about, 40 tons, to prevent, damage, to roads. That means that every extra kilogram, taken up by batteries. Is a kilogram. Not available, for cargo. So, even though hydrogen, is expensive, to produce. There is a sweet spot, somewhere, along this range axis, where the extra cost in fuel. Is regained, by the increase, in revenue. From the increased, cargo, capacity. I believe. That sweet spot, lies somewhere between, 800, and. Two 1200, kilometers. Below these ranges, batteries, are a more economical. Choice. So, a hydrogen-powered. Truck, would appear to be attractive. To a company, shipping, something heavy, like crates of beer. From its brewery, to distribution. Hubs around the country. This was clearly the case for nicola's, landmark, first customer. Anheuser-busch. The parent company, of budweiser. In november, 2019. They completed, a delivery. Using a nikola, hydrogen, fuel cell truck. Using the nikola truck to pick up a large cargo, of beer, from its st louis distillery. And delivering, it to a local distribution, center, where the cargo, was transferred, to a smaller, battery electric, powered, byd, truck, for further distribution. In the region, surrounding, the distribution, center. They have clearly seen the advantage, of both types of vehicle, can provide. And are using both to fulfill, their mission, in reducing, carbon, emissions. Okay, so nikola, has a clear market, that can benefit, from hydrogen, vehicles. Long-haul, trucking. However. That's not why i'm excited, about this company. Nikola, has found a solution, to hydrogen's. Next big problem. The lack of hydrogen, refuelling, infrastructure. Battery powered vehicles, have a pre-made. Fuel production. And distribution, network. In the electric, grid. Creating, a recharging, station, for one of these vehicles, is as simple, as installing, a charging point. Tesla, didn't need to build power stations.
Or Power lines to enter the market. Nikola. Does not have that luxury. They need to build electrolyzers. And ensure, that customers, can get access, to the hydrogen, they produce. When they need to refuel. Without this infrastructure, in place. No one is going to buy a hydrogen, fuel cell vehicle. It's a conundrum. What came first, the chicken or the egg, the vehicle, or the fuel. In order to serve the unpredictable. Travel patterns, of hundreds of thousands of drivers. Refueling, stations, need to be scattered. All over cities. And along major roads. Think about the logistics, of delivering, fuel, to those stations. Think about the capital, required, to build, them all, it's an insane, challenge. Nikola's, target market, makes this problem. Much, easier, to solve. There are approximately. 1.8. Million class a trucks, on the road, daily, in the united states. And 25. Of them, run, dedicated, routes. Where trucks simply drive from a, to b, and back again. By attacking, this market, first. Nikola, can slowly build electrolyzers. Along, major trucking routes, between, cities. Serving trucks, along one route. Gaining capital. And then expanding, to new routes. Slowly, expanding, their network, and servicing. These inflexible, routes first. This also eliminates, a significant. Cost, associated. With transporting. Hydrogen, via pressurized, vehicles. By attacking, this 25, percent of the market, first. They can raise the capital, needed to build the distribution. Network. And once the market has been penetrated. They will become, far more attractive. To the remaining. 75, percent of the market, that run flexible, routes. So, nicola, has identified. A viable, target market. And is using it to solve, hydrogen's. Largest, logistic, challenge. This is exciting. This could be the kickstart, the hydrogen, economy, needed. This is a viable, business. However. There is one giant problem nikolai, needs to overcome. The cost of hydrogen. As we saw earlier, at a certain range, hydrogen, makes, a lot of sense. If nikola, can drive the cost of the fuel down. It will drive the minimum, viable range, hydrogen, can compete, in and thus, increase, its target market. Hydrogen, is expensive, because of the amount of electricity. Required, to produce, it, let's compare, how much energy, actually makes it to the electric motors, of a battery, and hydrogen, vehicle. Starting, with the first step of the process, for each. Drawing, electricity. From the grid. Let's say we start with 100, kilowatt, hours of energy. The first step to charge a battery. Is to invert, the alternating, current. From the grid, to direct current for the battery. We lose about five percent, of our 100, kilowatt, hours, in this process. The first step in producing, hydrogen. Is electrolysis. An energy, intensive, process. Which will take about, 30. Of our 100, kilowatt, hours. Leaving us with about 70 kilowatt, hours, worth of hydrogen. For the 100, kilowatt, hours we put in, the next step for the battery. Is to take this dc, power, and charge the battery. This takes about, another five percent, as we lose some power to heat. Leaving us with about, 90.25. Kilowatt, hours stored, in the battery. For hydrogen, the next step is compression. In order to squeeze enough, hydrogen, into a small volume of space, we need to compress, it, this takes about 13. Of our energy. Leaving us with 60.9. Kilowatt, hours, worth of hydrogen. If we need to transport, this hydrogen. To the site of distribution. We would lose more energy. But, this is not a concern, for nikola's, current business model. Now we've, 90.25. Kilowatt, hours in the battery. And 60.9. Kilowatt, hours worth of hydrogen. In the fuel tank. Now we have to convert this back, to current, for the motors. Electric motors, require, ac power, so, once again, we need to convert the dc power, in the battery, to ac, with another, five percent loss. Converting, hydrogen, to electricity. Is a little bit more complicated. For this we need a hydrogen, fuel cell. A hydrogen, fuel cell is actually, surprisingly, simple. On one side of the fuel cell hydrogen, flows, through channels, in contact, with the anode. While oxygen, flows through the side, in contact, with the cathode. The hydrogen, comes in contact, with the platinum catalyst. At the anode. Which causes the hydrogen, to split, into a proton. And an electron. In between the anode, and the cathode. Is a proton, exchange, membrane. Which only allows protons, to pass through it. This forces, the electrons, to take an external, route, to the cathode. And in turn, this creates the electric, current, which powers the vehicle. The electrons. And protons. Then meet with oxygen, at the cathode. To form water. This process, is not very efficient, and occurs. 40. Power loss. With a large part of power, being lost to heat. During the chemical, reactions. This leaves us with about, 36.5. Kilowatt, hours, of energy. Fuel cells, also produce. Dc power. Which needs to be converted, to ac. For the motors. Costing, another, five percent. Leaving us with, 34.7.
Kilowatt, Hours, for our motors. In a best-case, scenario. So the final tally for the batteries. Is, 85.74. Kilowatt hours, versus. 34.7. Kilowatt, hours for hydrogen. That's, a huge, difference. Nikola, will need to make full use of cheap curtailed. Solar, energy during the day, which is likely why they chose arizona. As their headquarter, location. Excess solar energy, has been a massive, issue for arizona's, neighbor, california. California, has been increasing, its solar energy generation. Incredibly, quickly. But has not been building enough flexible, grid balancing, measures, like batteries. Water desalination. Pumped hydro, or, hydrogen, generation. To take the excess electricity. The solar plants create, in summer. This excess electricity. Can overload the grid. So the grid operators, need to find a home for it, so, california. Has actually paid its neighbor, arizona. To take electricity. From them, to avoid overloading. Their grid. The smart thing would be to disconnect. Their solar panels. But they want to pretend, that they are removing, carbon dioxide, from the atmosphere, by doing this, even though arizona. Just disconnects, their solar panels, to take the payday. This is creating, an incentive, for arizona. To create, new grid loads. To put this energy into, and to boost, they often have their own overproduction. Of solar energy. As they are the second largest solar energy producer. In the us, after california. This dynamic, is only going to grow as countries strive to increase their renewable, energy percentages. And so. Countries will need to create, a market for flexible, grid loads. Hydrogen. Is an attractive, candidate. For several, reasons. Hydrogen, has many potential, uses. It can be used for transport. Home heating, and grid storage. It can be traded, over long distances. Allowing countries, with cheap renewable, energy, like say north africa. To create, an energy economy. One that does not rely on oil. Natural, gas lines can be retrofitted. To instead, transport hydrogen. Europe, is already planning to do exactly, this in several locations. This is my renewable, technology, nerd dream, but nikola, still needs to overcome, the current fact, in the grand scheme of things, hydrogen, is not competing, with batteries, in nicholas business model. It's competing, with diesel trucks. And nikola has created, an interesting. Bundled, leasing model, to guarantee. Its customers, a cost competitive, truck, by focusing, on the total, cost of ownership. The total cost of ownership, is primarily, driven by the fuel. Maintenance. And cost of the truck itself. And nicola, has done its research. In just slightly. Undercutting, the total cost of ownership, of diesel trucks. Using data from the american, transportation. Research, institute. Nikola has estimated, the total cost of ownership, for a diesel truck, at 98, cents per mile, with 26, cents going to vehicle payments. 21, cents going to service, and maintenance. And 51, cents going to the fuel. So, nicola, has done the dastardly, thing and created, a lease model, that bundles the price of the fuel, maintenance, repairs. And the price of the truck, at 95, cents per mile. This completely, eliminates, the risk of early adoption, of this new technology. Which is precisely. Why nikola, is winning orders, with massive, corporate firms. And by nicola's, pricing calculation. Each one of these leases, will net the company. 173. Thousand dollars in profit. At that profit, 6000. Leased trucks, would bring in over one billion dollars in profit, every seven years. The next piece of the puzzle, will be fulfilling, these orders. Ramping up manufacturing. Is an incredibly. Difficult task. And tesla has proven that and managed to overcome, that, by itself. That is a massive achievement, that i'm not entirely, confident, can be replicated. Nikola, is making the smart move of partnering, with an existing, truck manufacturer. To ease this problem. In september, 2019. Iveco. One of the world's largest, truck manufacturers. Invested. 250. Million, into nikola. 100, million of this was a cash investment. The remaining, 150. Million, came in the form of engineering. And production, services. Including, rights to license. And adapt, the design, of a vaco's, s-way platform. In a similar way, tesla partnered, with lotus, to license, its chassis. For the tesla, roadster. This partnership, will give nikola, the head start, it needed, to begin, production. Nikola, has plans for battery electric vehicles, too, with a 300, mile range truck, the badger pickup truck, and they just received, a huge order of, 2500. Battery electric, garbage, trucks, from one of america's, largest, trash collecting, companies, republic, services.
Nicola, Without a doubt, has potential. What i am excited about is the prospect, of nikola. Opening the door for hydrogen. Which i earnestly, believe, is inevitable. As an energy storage technology. The emergence, of hydrogen, as a fuel source, would turn the energy, market on its head. Access to fuel is power, both figuratively. And literally. A country, cannot function without power. It is the first step in building an economy. Britain's, industrial, revolution, was fueled by coal, world war ii was fought with oil supplies, as a focal point. Saudi arabia, went from desert, to global superpower. Thanks to having the good fortune, of having oil, buried beneath their feet. Russia, uses its natural gas supply. As a political, tool, with its neighbours, that need it to keep their electric grid operational. Hydrogen. Has the potential, to turn this dynamic. On its head for many countries. Any country with a plentiful, supply, of renewable, energy. And water, can create, its own self-sufficient. Power system. No more dependence, on other countries, for power. This is primarily. Why japan, is placing, its bets, on hydrogen. It is a country, with experience. In this political, maneuvering. When they attacked, french indochina. In 1940. Their oil imports, were cut off by the united states, as punishment. So, japan, with all the flawed logic of an expansionist. Imperialist, regime. Decided. The logical, next step, was to attack, the united states. In an attempt, to prevent it from interfering. With its invasion, of southeast, asia. Where they could secure, their own oil supplies. Fuel supply logistics. Have been the driver for an immeasurable. Amount of modern human history. I made an entire, video, on the logistics, of fuel supply. During the allied, invasion, of europe, through france. A gargantuan. Task, when you consider, that in the first week of the invasion. Over 55. 000 vehicles, came ashore. Over the beaches of normandy. You can learn how the allies managed to successfully. Keep their vehicles, fueled. In this new episode, which is available, exclusively. On nebula. Nebula. Is a streaming, platform, i created, with a collection, of over 100. Fellow educational. Youtube creators. This platform, has opened an entirely, new avenue for creation. For us. Unshackling. Our creative process, from the youtube algorithm.
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