Updated: Jul 7, 2021
Electric vehicles are all the rage in the automotive industry nowadays, with the rise of dominant figures like Tesla growing increasingly large. In July of 2020, Tesla's stock price surged upwards, and the 17-year-old electric-car company became the world's most valuable automaker, worth a mind-boggling $209 billion, taking the crown from Toyota. Although Toyota sold around 30x more cars in 2019 and its revenues were more than 10x higher, the company is valued at about $4 billion less than Tesla's current stock market value (as of July 2020).
Shares in Tesla have surged since the start of 2020 as investors have begun to feel more confident about the future of electric vehicles. This confidence in the future of electric vehicles is being seen throughout the world and is leading to a major shift in the automotive industry across all of the segments all the way from cheap, low-end hatchbacks, to high-end 1500+ horsepower hypercars. One segment where the electric car craze hasn't really kicked off is with pickup trucks and heavy-duty haulers - until now.
On the 21st of November 2019, CEO of Tesla, Elon Musk took the stage to unveil his take on the future of pickup trucks, called the Cybertruck. Along with the rest of the Tesla lineup, this pickup truck is also fully electric. The pickup truck community has been skeptical over electric pickups because firstly, pickups are built to go to remote areas and used for hard labor. Combining the ruggedness and toughness of a truck with a highly complex and technologically advanced electric vehicle is no easy feat.
Just about every farmer will tell you that an electric truck won’t fit their needs, and some might chuckle simply at the notion of it, and that's without them ever seeing one or driving one because the fact of the matter is: no one makes an electric truck, yet. This is because of how EVs are perceived. If the current market on electric vehicles is anything to go by, most people would assume that EVs are, for the most part, small cars with limited physical dimensions that prevent having big battery packs to provide an equally big range, with a few obvious exceptions. As we'll see later, this is slowly changing, as more and more manufacturers invest in EVs and electrification across the board (or at least some form of a hybrid powertrain).
Farmers are partially right though, as most current EVs are made for urban dwellers with access to charging infrastructure within their vicinity, reducing the need for big batteries and long ranges. Electric pickups are something that many people simply didn't have on their radar a couple of years ago, and now all of a sudden the electric pickup market has just exploded. Tesla took the charge to kickstart the electric pickup race, prompting old-timers such as Ford and GM to get cracking.
The Ford F-150 is the best-selling car in the USA. In fact, the entire F series of trucks is one of the biggest automotive successes ever made. Ford sells on average about 1.7 pickup trucks per minute, which is about 103 F-150s per hour and over 2400 F-150s per day. These are some astonishing numbers that really go to show how important the pickup truck segment is not only in the US but worldwide as well.
As the world moves on a more sustainable path, growing concerns over the earth's resources and global climate change have catalyzed a movement towards more efficient vehicles. A major problem with current gas-powered pickup trucks is that they're just big gas-guzzling machines with extremely poor mileage. It's time for the pickup truck to be reinvented and Tesla's not the only one in this electrification race. Not only the previously-mentioned old-timers like Ford and GM, but startups like Rivian, Bollinger, Lordstown Motors, and Nikola are all working on electric pickups, and the race is on for who will be first to the market. This begs the question...will loyal pickup truck owners make the switch to electric
The Old-timers (& Tesla)
To really convince a true motorhead buyer for a new pickup truck, it's going to take some serious convincing that electric pickups have some serious and noteworthy advantages. For Ford and GM, this battle is for them to defend their market share, but for Tesla and the rookies, this is about piercing their way into the market. Ford, GM, and FCA are currently the largest benefiters in the pickup truck boom. At Ford and FCA, it accounts for about 30% of all their sales, and GM calls their business a $65 billion business. The Detroit automakers dominate the pickup truck segment, and as Michael Wayland from CNBC put it, it's their bread and butter.
GM is working towards an all-electric future. In 2020, they resurrected the Hummer brand with their all-new Hummer EV which is their brand new electric truck under the GMC brand, which is a modern take on the original Hummer vehicles. In the next 2 years, Ford will be launching an all-electric pickup truck believed to be based on the F-150 platform, which has been the best-selling vehicle in America for the past 43 years. Tesla's event last year got a lot of attention, with over 535,000 orders rumored to have been placed already. The company has started construction on a factory in Austin, Texas in which the truck is to be built. This is very strategic of them, as pickups are quite popular with Texans who have historically gone generations with buying Fords and Chevys. They've gone straight into the heartland of America, but whether the buyers are ready to make the switch is yet to be seen.
As pickup trucks have hardly changed over the years, the Cybertruck is different, to say the least. As Jay Leno once said that pickup truck buyers are usually conservative with what they like. It needs to look like a pickup truck, but the Cybertruck doesn't look anything like a pickup truck. What it does do is make those pickup trucks look old fashioned. Franz von Holzhausen, a senior design executive from Tesla has said that there's a preconceived notion of what a pickup truck should be, so Tesla took the bold path. They've certainly got people's attention, and with the highly polarizing design slowly growing on people, especially me, more people are coming to like it.
However, there are some issues with the Cybertruck prototype that was shown off at the event. There aren't any side mirrors, which makes maneuverability and all-around visibility for such a large vehicle quite difficult. Elon Musk was seen running over a cone while out testing the Cybertruck last year, which goes to show that there is definitely a need for these mirrors. Another issue is the material that the car is made of. The Cybertruck's exoskeleton is made from Tesla's own stainless steel alloy, referred to as the Ultra-hard 30X Cold-rolled Stainless Steel. While it is extremely rigid, it completely eliminates the crumple zone seen on modern-day cars which is absolutely necessary for safety. This means that impacts from crashes in this car would be far more fatal than in other cars.
In its current state, it probably won't be able to meet pedestrian safety and crash test standards. On the plus side though, it is bulletproof proof, seen from the demonstration last year. Unfortunately, the glass had cracked in the demonstration last year because it was swung with a sledgehammer before the bulletproof test which weakened the glass. Nevertheless, from the ball drop test, we know that the glass is extremely tough. The car is about 5% too big, and Elon has said that the overall footprint of the car will be reduced, along with a change in the tires which don't look production-ready at all. With little progress on production, it looks unlikely that Tesla will meet their target of deliveries by late 2021, especially when you factor in their not-so exceptional track record, not to mention the literal pandemic that has caused immense delays.
Let's talk about the EV startups. Rivian is one of the EV startups that has been around the longest. The company is based in Michigan and was founded way back in 2009. The company was in what you could call a "stealth mode", working in the shadows to develop their own electric pickup for the masses. Its pickup truck called the R1T is slated to be delivered to the hands of consumers in 2021, along with its SUV called the R1S. Unlike Tesla which developed their technology primarily on their own, Rivian has cozied up with pickup truck experts Ford, receiving a $500 million investment. Rivian bought a factory previously owned by Mitsubishi to produce their vehicles. Rivian's vehicles are really nice, modern-looking vehicles. Among the bunch, they're likely to be first to market and they've got a lot going for them. The company has released videos and images of their vehicles being tested offroad to prove its worthiness.
Rivian's vehicles are aimed at a lifestyle buyer, typically someone with a lot of disposable income and would like to go offroad and camping on the weekends. The company has raised over $6 billion without even selling a single vehicle. They were fortunate enough to also receive an investment from Jeff Bezos' very own Amazon of $700 million, which is an unlikely backer in the automotive industry. Rivian plans to build 100,000 electric delivery vans for Amazon as part of the deal. This is a huge deal for the company, which certainly propels them ahead. Despite all of this, the company will still be a low-volume player at least in the beginning as they enter the automotive industry.
Another startup is Ohio-based Lordstown Motors. Their truck called Endurance is also set to come out in 2021. The company just went public via a SPAC. Steve Burns, CEO of Lordstown said they're in the race to be first after they purchased the Lordstown assembly plant from GM, which is where the Endurance will be produced. President Donald Trump endorsed the pickup in a public event saying that it is the future of trucks. Instead of catering to the luxury buyer (which Rivian caters to), Lordstown plans to sell trucks to fleets and focus on the commercial truck market, at least initially, which makes sense. If the company was catering to consumers, they would need to provide premier service to consumers all around the US. Burns says that once the company has service centers all across the US, there is a possibility of them opening up to serving consumers. The company has secured over 50,000 pre-orders which is about $2 billion in revenue.
Bollinger is another new startup that focuses more on a simplistic modern design pickup truck, with an incredibly boxy design. Personally, their vehicles remind me a lot of the old Land Rovers. The Michigan-based company plans to come to the market in Q4 of 2021 but will have another manufacturing company build the actual vehicles. The company is yet to announce its manufacturing company, but have promised to do so soon. The company has unveiled its pickup (the B2) and SUV (the B1), with plans to build their own delivery van like Rivian. Bollinger and Lordstown are taking the work truck route. Recently in December 2020, Bollinger unveiled the design of the production-ready vehicles, which I'm not much of a fan of compared to the original design, especially in the two-tone color they showed off.
Lastly, we have Nikola Motors. The company unveiled renders of their upcoming Badger pickup truck after they went public via a SPAC. Compared to the other companies, they're a little different, to say the least. Nikola is really pushing their semi-truck, which they plan to release first, and then they plan to come out with their Badger pickup. To bring the Badger to market, Nikola had announced an insane $2 billion deal with GM, but after the company was accused of fraud by a short-seller called Hindenburg Research and the CEO Trevor Milton was accused of sexual assault, the GM deal was called into question.
Why the heck would GM partner with Nikola, a company that has no track record? I knew from the beginning that something about this company was fishy. They named themselves Nikola, taking the first name of the scientist Nikola Tesla, which Tesla took their name from. There it is - they're a Tesla rip-off. The company's journey has been riddled with lies and has been faced with multiple lawsuits. How did such a shady company get anyone to trust them, especially GM? Who is the founder of Nikola really? Why are the feds coming after him?
Obviously, the first company to get their EV pickups on the road and into consumers' hands would be raking in the big bucks. GM decided to take as big a piece of that market as they could, and saw an opportunity with Nikola. GM is not one known to take risks, so they sought out to essentially benefit off the work of another company. First of all, who is Nikola's founder. Well, he's probably the biggest con-man the automotive world has ever seen. Trevor Milton is a college dropout from Utah with an entrepreneurial spirit. He's had his share of business failures in the past, and in 2014 he joined the race to be the first to produce an all-electric pickup truck and compete with Tesla.
Milton's mission for Nikola was to be a leading manufacturer of battery and hydrogen-fueled zero-emission semi-trucks. So, he must have a well-experienced team that knows exactly what they're doing right? Well, not exactly. Not at all in fact. His brother, Travis Milton, was named director of hydrogen production infrastructure, with according to Donut Media, no relevant working experience. His past work experience was apparently pouring concrete on driveways, which has nothing to do with his role at Nikola. Somehow, through charisma and luck, the brothers managed to garner interest in their startup, which is impressive given their minimal experience.
In 2016, just 2 years after the company was founded, the company unveiled the Nikola One - their hydrogen-fueled semi-truck which was set to go into production by 2020. Admittedly, the prototype does look rather nice, and despite the lack of any proven technology, Milton claimed that the truck was "not a pusher" and that it was "fully functional", which didn't leave too many convinced. Despite all that's kept under wraps and the oddly defensive statements, Anheuser-Busch ordered 800 trucks, which was a huge deal that triggered more interest, investment, and pro-orders. After Nikola stocks went public, Milton became a billionaire and was validated as an influential force in the electric truck scene.
It was then, on the 8th of September 2020, GM announced its partnership with Nikola to manufacture the electric and hydrogen-powered Badger. The Badger was expected to have 906 hp, 980 lb-ft of torque, 600 miles of range, and cool optional extras like a refrigerator and water fountains. I do like the way the pickup looks, and I was hoping to see it someday on the roads. Nikola would build and sell the vehicles but GM would provide the majority of the parts, as part of the deal. GM would get 11% of the company in shares which is about $2,000,000,000. This deal was major. GM would provide fuel cells for their semi-trucks and would nominate a director to Nikola's board. When it was announced, Nikola's stock surged by 33%. At the time, it was looking well for everyone.....for 2 days.
Reports and various articles were reporting on how Nikola managed to lure the largest Automotive OEM in America into their gigantic web of lies. The Hindenburg Research group released a 67-page report depicting several text messages, emails, documents among other things aimed to take down Nikola and Trevor Milton. The report primarily highlights how Milton's entire career has been built on dozens of lies which he somehow managed to turn into a $20 billion company. The report also includes a list of whistleblowers ready to out Milton for the fraud that he is.
Some of the most shocking details include that the semi-truck unveiled earlier never actually worked. It was never completed and couldn't even power itself for the event. There was a cable that was snuck through a tiny hole from the bottom of the stage used to power the vehicle. Artists stenciled H2 and ZERO EMISSION branding on the sides even though there were no hydrogen components on board. Multiple whistleblowers detailed that they had to run to hardware stores for loose parts during the show. Faced with immense pressure, Milton finally confessed that it was never finished but claimed that he never said that it was, even though he clearly did.
Milton also released a video of the same truck in motion, which according to text messages, was faked by towing the truck to the top and letting gravity do the rest. He also claimed that Nikola's facility was completely powered by 3.5 MW solar panels that were installed on the roof, yet a simple look on Google Earth proves this to be another lie. Nikola also promised a new battery that would revolutionize the industry, which was again a lie. Milton also claimed that all the technology was proprietary, yet a quick Google search shows that the inverter on the truck is one made by a company named Cascadia Motion, whose logo was covered by tape.
What matters is that the damage has been done. The DOJ launched a federal investigation into Milton and his lies about having technology which he clearly didn't and how he misled investors. With the feds after him, Milton resigned from Nikola. For some time GM stuck by their deal with Nikola and appointed executive chairman Stephen Girsky, who was a former GM vice-chairman. Perhaps they thought they could salvage whatever they could from Nikola until two women came forward accusing Milton of sexual assault, which was the last straw. Milton denies all allegations, yet he isn't the most credible, is he? GM released a statement that they do not condone this in any way shape or form and brought the deal to a bitter end.
"We are 100% focused on hitting our development milestones to bring clean hydrogen and battery-electric commercial trucks to market," said Nikola's new CEO Mark Russell, Milton's replacement. On the 30th of November 2020, GM announced that they will allow Nikola to use its hydrogen fuel-cell technology in semi-trucks, but GM will no longer be owning Nikola shares, a reversal from a proposed 11% equity stake outlined back in September 2020. The new arrangement also drops plans for GM to manufacture the Badger. The two companies have reevaluated their relationship. The allegations of deception have hammered the once high-flying Nikola stock prices. Nikola's reputation and ability to deliver on promises as well as transparency with investors is tarnished.
“This went from a game-changer deal for Nikola to a good supply partnership but nothing to write home about,” said Dan Ives, a Wedbush Securities analyst. “No ownership/equity stake in Nikola and the billions of R&D potentially now off the table is a major negative blow to the Nikola story.” Nikola will now be working with Bosch and Iveco in Germany to build their hydrogen-powered big rigs. The company also has plans to find a partner to help it roll out an ambitious hydrogen-fueling network. Nikola aims to complete its first commercial hydrogen-fueling station in the second quarter of 2021.
Oddly enough, Nikola isn't the only company that's been in hot water lately. GM too has also had their share of controversy but this time its got nothing to do with Nikola. The company showed off the capabilities of their new Hummer EV in various promotional videos doing some impressive offroad work, even displaying their all-new crab-walk feature which allows the 4 wheel steering to turn all the wheels in the same direction, allowing the car to move almost horizontally. The pickup has a claimed total of around 1000 horsepower from three electric motors in the top range variant, with about 350 miles of range per charge. 0-60 mph is claimed to be about 3 seconds. The Hummer EV also features removable roof panels, like a Jeep Wrangler.
What exactly was the scandal then? Well, the vehicle they showed in their promotional videos of the truck going offroad was all done using CGI. The company had a physical prototype at the time which they showed off at an event, but it didn't actually work....until now where they finally have a working model that's been spotted testing. Obviously, this was not as big of a scandal as the other one, but it's still noteworthy as there were a lot of angry, concerned, and skeptical investors and customers who had already made reservations for the EV. Companies like Rivian spent years both developing and testing their vehicles before their release. Off-road vehicles like the Hummer usually go through years of real-world testing, which simply won't be possible with the Hummer EV as it's slated to go on sale about a year from now. Don't look surprised if GM ends up delaying the release...I warned you!
To sum up...
Scandals aside, the big question is will EV pickups go mainstream? Right now it's hard to say, but the companies building them are confident that they will be a success. If you ask me, I think that EV pickups are bound to take over at some point, so definitely yes. Initially, there may be troubles as the volumes of these vehicles are low, so their margins may be low, but over time I'm hopeful that this will change. Just look at the rise of Tesla. From a crappy electric car company that retrofitted an electric powertrain onto a Lotus, to a revolutionary automotive giant.
In the long run, although there are immense advantages to EVs, Americans (who are the most popular buyers of pickups) don't seem ready yet to make the switch as EVs only make up 1.5% of new vehicle registrations as of 2020. Early adopters will be innovators, but once the tipping point is passed and these pickups go mainstream, all that's left is convincing the conservative pickup truck buyer that stands deep in the roots of the pickup truck, embedded in American history. Electric vehicles are expensive, there's no doubt about it, but once this hurdle is overcome, there'll be no looking back. At the end of the day, it's all going to boil down to the usability of the truck. The range, the infrastructure, the durability, and the consumers believing in their capability. The fact is that people are resistant to change. People have been filling their pickups with gas their whole lives. Changing that mindset is tough, but it's what's best for everyone.