This Will Totally Revolutionize The U.S. Transportation Industry… Or Will It??

Nikola-One

Last month a new company announced that it would produce a vehicle that would totally revolutionize the U.S. transportation industry.  It was Nikola Motors located in Salt Lake City, Utah.  Not only does the company plan on producing the vehicle in large numbers, it has already pre-sold $2.3 billion of the units.

The sleek aerodynamic semi-tractor called the Nikola One, is a hybrid gas-electric truck that will get 2-3 times the MPG (miles per gallon) compared to a typical diesel engine semi which accounts for 95%+ of the U.S. trucking fleet.

Here are some comparisons between the Nikola One Electric semi-truck and its diesel engine counterpart:

Nikola-One-Electric-Advantage

(Courtesy of Nikola Motors)

The Nikola One is certainly impressive as its horsepower is four times (2,000 hp) greater than of a typical diesel engine (500 hp).  The Nikola One has so much more horsepower compared to a standard diesel engine for two reasons:

  1. The Nikola electric motor is much more efficient (95%) than a diesel engine.
  2. There is an electric motor for each tire (or set of tires).

Powered by these six high-efficiency electric motors (six-wheel drive), the Nikola One pulling a 80,000 load can go up mountains at 65 mph while the typical diesel engine semi struggles between 20-40 mph.  Furthermore, not only can the the Nikola One accelerate twice as fast as its diesel engine counterpart, it can stop up to two times faster.

There are many other advantages of the Nikola One which you can check out at their site: Nikola Motor Company / Nikola One.

Now, if the superior performance and fuel mileage of the Nikola One doesn’t win over the U.S. Trucking Industry, maybe Nikola Motors leasing program will.  According to the recent press release, Nikola Motors will pay all the fuel and maintenance for the first 25,000 units leased for either 72 months service or 1,000,000 miles driven.

What a DEAL RIGHT?

Maybe… or maybe not.  When I first came across this new truck a few days ago and read about it, I was quite impressed.  However, as I started to read other articles and think about the truck and the company more logically, I became more skeptical.  Before I get into my thoughts on this truck, I can imagine many of you want to know what the STICKER PRICE is.

The Nikola One goes for $375,000 or can be leased for $5,000 a month for 72 months.  That’s a lot of money.  A typical brand new diesel engine semi-tractor ranges between $145,000-$160,000.  While it’s true that the Nikola One would have significant savings for fuel, let”s do some math here:

Based On 1,000,000 million miles of service (based on $2.50 gal diesel):

Nikola One = $125,000-$175,000 fuel cost

Diesel Engine = $400,000 fuel cost

If we add the cost of the unit, we have the following:

Nikola One:  Cost/ $375,000 + Fuel/$150,000 = $525,000

Diesel Engine: Cost/ $155,000 + Fuel /$400,000 = $555,000

Looking at the numbers here, there’s not much difference.  By owning a Nikola One, what a truck owner doesn’t pay in fuel, he pays for in technology.  Remember, technology costs energy to produce somewhere down the line.

The only benefit is seen by those who lease the first 25,000 units.  Nikola Motors says they will pay for the compressed natural gas fuel for the first 25,000 units leased.  Well, where are they going to get the fuel and where are the fueling stations?

THERE LIES THE RUB…. there aren’t any fueling stations currently.  This was covered in a recent article on the Nikola One:

The biggest problem with running a vehicle that uses compressed natural gas for fuel is finding natural gas filling stations, but Nikola Motors has “plans” for 55 “strategically positioned” CNG stations across the United States and Canada—about one for every 800-kilometer stretch of road along popular trucking routes. Nikola says it will supply these stations using its own natural gas wells, allowing it to pump out “millions of gallons of clean natural gas each day.”

As you might expect from a startup, all of this stuff sounds pretty great. But we’re obligated to point out that there are a lot of grand plans but little in the way of execution. Furthermore, this level of hype always makes us vaguely suspicious, especially when the one number that we can actually fact check, the preorder amount, is at best confusing and at worst deceptive. That “$2.3 billion in presales” refers to 7,000(ish) deposits to reserve a truck worth approximately $375,000. But each deposit is a fully refundable $1,500—not the full $375,000—meaning that Nikola Motors has received slightly over $10 million. It’s a significant amount of money, but that $2.3 billion isn’t really meaningful at this point.

Nikola-Motors-Planned-CNG-Filling-Stations

(Courtesy of Nikola Motors)

As the author states, there are PLANS to build 55 compressed gas filling (CNG) stations, but there aren’t any today.  In addition, even though the company stated it presold $2.3 billion worth of the units, it only received a little more than $10 million.  This is based on a totally refundable $1,500 deposit on each unit.

Nikola-One3Unfortunately, there is one additional catch with the Nikola One.  Even though they presold 7,000 units to very excited customers, they don’t have a prototype yet.  The images in this article are computer renderings.  The company says they will reveal the Nikola One prototype on Dec 2nd in Salt Lake City, Utah later this year.  I imagine that $10 million is being used to help with the cost of producing that prototype.

While the Nikola One design and forecasted performance are quite impressive, there’s a lot SIZZLE, but very little BACON.

This reminds me of Boone Picken’s plan to have the U.S. trucking fleet run on LNG (liquid natural gas).  There were a lot of LNG filling stations built across the United States and many are sitting idle.  Where I live, there is a nearby truck stop with a brand new LNG filling station, built a few years ago… with large barricades around it.  It’s never been used.

Monthly-Dry-Shale-Gas-Production

Furthermore, U.S. Shale Gas production has peaked and is already declining.  Sure, maybe part of the decline is due to the lower natural gas price, but two  of these shale gas fields (Barnett & Haynesville) peaked back in 2011 when the price was more than double what it is today.

It will be interesting to see how the Nikola Motors Company progresses over the next few years.  If they can come up with their Nikola One prototype by Dec 2nd, they still have to manufacture the truck and build all the 55 filling stations.  Oh, did I leave out the part where they are going to drill, produce and transport their own CNG from their own natural gas wells?

To be honest, I like the look of the Nikola One.  It would be neat to see one on the highway.  However, technology such as the Nikola One will not save us from the inevitable financial and economic collapse based on Peak Oil and the Falling EROI – Energy Returned On Invested.

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30 Comments on "This Will Totally Revolutionize The U.S. Transportation Industry… Or Will It??"

  1. The transition away from fossil fuels should have started 20 years ago. Of course that was less profitable then. Profits, greed, growth; f*ck the future, let’s try negative bond yields and monetize corporate bonds. Manipulate the S&P, and soon, drop ‘money’ out of helicopters to keep the dream alive. What’s the ecological footprint of this truck? The beast feeds on profit, so profit it is.

  2. Robert Happek | June 18, 2016 at 2:20 pm | Reply

    Electric motors do not run on gas. They require electricity in order to run. The quoted power of 2,000 hp means electrical power equivalent to a few megawatts of electricity. That is a lot of electricity. On their website, Nicola One states that the electricity will come from onboard batteries (like Tesla). The gas is only used to fuel a turbine which burns the gas and converts it into electricity in order to charge the batteries on the go. So the concept is really the same as employed by so called hybrid cars (like the Prius by Toyota), except that the combustion engine is replaced by a turbine which produces electricity only.

    This makes all sense. The disadvantage is of course the high cost of the battery. Replacing such a battery could be a very serious expense. However, if we ever run out of diesel oil, this is essentially the only option to continue trucking. Efficiency wise, a truck is not as good as a train. A train runs on electricity only and does not require a gas turbine to generate its own electricity. Further more, steel wheels running on tracks are much more efficient than rubber tires on regular pavement. A modern train system has a much better EROEI ratio than a truck. The future is most certainly in trains, not in trucks.

    • If i had to walk to the train station to get my food, i’d sign for it.

    • Robert;

      Points of order.

      1. “Electric motors do nut run on gas.” They may not “run on gas” but the vast majority of power plants in the US that generate the electricity they do run on are powered by fossil fuels.

      2. I don’t know where you live but except for city subways, the vast majority of trains in this country are powered by diesel engines.

      3. The other option (and most likely long term IMHO) is for the trucks to be electric only with charging stations every whipstitch powered by small nuclear power stations.

      There is going to be a very long and painful learning curve as oil approaches depletion. The longer we wait to start the process the more painful it will be.

      SteveW

      • Robert Happek | June 20, 2016 at 9:31 am | Reply

        Hi Steve,

        I live in the New York City area. Amtrak service in the Boston – NYC – Washington DC corridor is all electric running at speeds up to 100 mph. In Europe and in Japan, all train traffic is electric. Even in the backward Russia, the famous trans Siberian train is pulled by electrical locomotives. I do not understand why most trains in the US are powered by diesel engines. Most certainly, this is not very economical. One great advantage of electrical trains is that they are able to convert the kinetic energy of the moving train back into electricity (fed back into the grid) when braking. This further increases the efficiency of electrical trans. This point is important in the design of high speed trans where the amount of kinetic energy is substantial.

        Your third point, running trucks on batteries and recharging the batteries at special charging stations, that is already reality in Europe. In Germany and in Switzerland, electric city buses are in operation which run on battery power. At every scheduled stop, the batteries are automatically recharged during the bus stop, even if the bus stops for less than 1 minute. The batteries can be kept small because they are being recharged every few minutes. They are also never completely discharged which helps to extend their effective life span.

        Regarding nuclear power stations, I think this is an obsolete technology. The fundamental problems of nuclear reactors have not been solved, There is no effective technology available for deal with nuclear accidents (Fukushima and Chernobyl). Among all forms of energy, nuclear is the most expensive one. I firmly believe the future is in wind and solar plus storage plus an intelligent grid. Our grid as we know it, is less than 100 years old. It will evolve in the coming centuries similar to many other technologies. History has shown, no technology is permanent. It all depends on progress in physics.

        The learning curve does not have to be painful. To the contrary, it could be joyful and exciting if more people are willing to study these problems seriously. Right now, many people talk about these issues, but very few actually work on solutions.

        • Robert,

          The problem with wind power and solar power are the same as ethanol. They don’t pass the Energy Return On Energy Invested test. It costs more in energy to make them than you ever get out of them. The other major problem with them is that they are geographically and climate limited.

          Nuclear power, on the other hand, even with all it’s drawbacks, is the only alternative that passes the EROEI test So we need to devote our resources to developing safer, smaller and cheaper nuclear power plants. We also need to stop building them on fault lines.

          • Robert Happek | June 22, 2016 at 7:59 am |

            Steve, regardless how often people repeat that wind and solar do not pass the EROEI test, it remains a myth which has no basis in reality. I have 12 solar panels on my roof since roughly 10 years. These panels produced close to 30 MWH of electricity (measured by a 1% accuracy device) so far. On sunny summer days, the system produces 17 KWH per day and that figure is constant over the years. I have not noticed any decline in production over the years. Which means that my panels still run like new.

            I doubt that the production of my panels required more than 30 MWH of electricity. As a matter of fact, years ago I read claims by a production engineer working for Siemens that it takes only 4 years for solar panels to produce the electricity which was spend producing the panels. Technology has improved since then and I am sure that the figures got even better since then.

            Solar and wind are economical as long as EROEI are greater than 1. When discussing the economics of the various electricity generating methods, one needs to be very honest about all the costs being properly accounted for., For instance, with nuclear, how are the future costs of dealing with accidents and disposal of the spent fuel accounted for ? This is a very serious question since the cost of disposal of nuclear ash will have to be accrued for centuries to come. I am sure that these costs are being neglected. Similarly, with conventional fossil fuels (coal and NG), the cost of pollution and the cost of depleting these valuable resources, how are these costs accounted for ? I bet that these costs are being totally neglected. With dishonest accounting like that, it is easy to conclude that “wind and solar are uneconomical and only nuclear is a cable option”. A statement like this is pure politics and it is not based on science and sound economics where all the costs are properly accounted for.

            I repeat: The future belongs to wind and solar. All other forms of energy are only temporary at best.

    • Not trying to sound pedantic but it is more like a Chevy Volt than a Prius.

    • Actually, there is almost no need for trucking – everything the economy of scale wins, is burned down by transporting crap over thousands of miles, especially, if we add together also the investment in infrastructure covered by tax money.

  3. If you are considering new technologies, I’d look at elio motors. They have an interesting car that gets 84 MPH. They have not sold a car yet, but are taking preorders. They plan on manufacturing in Louisiana. It’s a big change from Your typical American SUV, but at least we will still be able to get around should peak energy hit us at the pumps and increase the costs of basically everything. Eliomotors.com

  4. If an electric motor is 90% more efficient and the EROI of the fuel is 5 to 1 doesn’t that make the EROI 9 times 5 or 45 to 1 in an electric vehicle compared to a Diesel vehicle?

    • Barry;

      Your math is backwards. .

      Electric motors have the following efficiencies;

      NEMA Design B Electrical Motors
      Electrical motors constructed according NEMA Design B must meet the efficiencies below:
      Power
      (hp) Minimum Nominal Efficiency 1)
      1 – 4 78.8
      5 – 9 84.0
      10 – 19 85.5
      20 – 49 88.5
      50 – 99 90.2
      100 – 124 91.7
      > 125 92.4
      1) NEMA Design B, Single Speed 1200, 1800, 3600 RPM. Open Drip Proof (ODP) or Totally Enclosed Fan Cooled (TEFC) motors 1 hp and larger that operate more than 500 hours per year.

      Power Plants Have the following efficiencies;

      To express the efficiency of a generator or power plant as a percentage, divide the equivalent Btu content of a kWh of electricity (which is 3,412 Btu) by the heat rate. For example, if the heat rate is 10,500 Btu, the efficiency is 33%. If the heat rate is 7,500 Btu, the efficiency is 45%.

      2014 Coal Petro NatGas Nuclear Efficiency(average)
      Steam Generator 10,080 10,156 10,408 10,459 33.2%
      Gas Turbine — 13,457 11,378 — 27.48%
      Internal Combustion — 10,403 9,375 — 34.5%
      Combined Cycle W 9,924 7,658 — 38.81%

      So, from a 125 hp electrical motor (most efficient) powered by a combined cycle power plant (most efficient) the over all efficiency is;

      .924 x .3881 = .3586 or 35.8% efficient

      Solar cells are 11%-15% efficient (not including the energy cost of manufacturing). Natural gas in combined cycle generators is the most efficient at 44.6%.

      The most important thing to remember is that for every conversion of energy (coal to steam to electricity or gas to steam to electricity or gasoline to motion) there is a tremendous loss of efficiency for each and every step.

      Gasoline motors are about 20% efficiency and diesels are nearly 40% efficient. So for future energy will will have to rely on nuclear (efficiency is irrelevant as input is limited), vegetable diesel and sucking every last btu out of natural gas as long as we can.

      SteveW

      • Then why does it cost about $2.00 to go 100 km on renewable electricity in a Nisson leaf here in Australia and $10 the go the same distance in my petrol car? If I installed solar it would be even cheaper.

        • Barry,

          Electrical motors are on average twice as efficient as gasoline motors (36%/<20%). Without knowing the age, horse power and weight of your car it is not possible to calculate the true difference but the biggest difference is the taxes on petrol versus taxes on electricity. That's government not thermodynamics.

          As for solar, it would depend on whether you included the incremental cost of the system and the size of the system but you would be power tax free.

          SteveW

          • In 2015 oil received almost half a trillion in government subsidies world wide. But when renewables receive a fraction of that in subsidies there is a song and dance. Thus the tax.
            One thing Steve does not take into account is the adoption curve of electric cars. I think when the world starts buying EVs just like they bought fridges, washing machines and mobile phones there will be plenty of cheap oil around. Unfortunately because oil is the new gold it might cause an economic collapse along the way as the US dollar reserve is so tightly connected to it.
            Though I admit I am no expert on the matter.

  5. Ford produced CNG Crown Vics in the 1990s.
    GM produced CNG Caprices in the 1990s.
    Neither sold, even though they would automatically switch to gasoline when the CNG ran out.

  6. All I want to know is…. can I drive one with a Class C License?

    • Jud,

      With politics the way it is you will also need a degree in electrical engineering.

      Keep on trucking and stacking!

      SteveW

  7. Regardless of the efficiencies of CNG and LNG companies like Ryder and Penske are having a huge problem getting current diesel customers to convert. Less than 1% from what I understand. Diesel prices are low right now and which makes shelling out the money for new converted units less attractive.

    Plus, the onslaught of heavy-handed regulations, hefty new fines for slight paperwork “infractions”,and the added complexity and higher cost of maintenance have all created this perfect storm of hoarding cash. Drivers and business are feeling the pinch big time and are not willing to spend while they are in defense mode from getting pick-pocketed.

    Certain states are offering tax credits for CNG and LNG but only the big boys like Anheuser-Busch are making the conversion. Medium to small businesses are not following suit.

    Also companies like Ryder and Penske have enough CNG and LNG stations in the US to make fill up a non-issue.

    However, I am of the opinion that these are all sound good “green” ideas but the realities of the current business environment and hesitation to spend on non-essential items at this time makes it all a moot point. Soon enough the Gov’t will start mandating conversions (as no one wants to voluntarily) and a big consolidation will take place.

    Small and independent rig owners are already being squeezed big time and barely hanging on. This will be the nail in their coffin.

  8. Trains can do the trick but terrorists will find them super easy to derail. Trucks it is for the new world order.

  9. To me, this just looks like they are trying to outdo the Klintons with their Kommunist Klinton Foundation scam! There are just too many loose ends in this scenario, which sets off all kinds of alarms for me. Such as just WHO is tooled up to make these gas turbine engines and the drive motors in sufficient quantities, to even get an assembly line moving? WHO designed this GTE and has it been field tested enough to ensure its reliability? HOW are they going to make sure that enough heavy truck mechanics (such as myself!) have the right training to be able to understand and troubleshoot the systems when they go awry? Or are they guaranteed to never break down? Are these drive motors fully self powered, or do they utilize permanent magnets? WHO is going to make those magnets, and at what cost? WHERE are the new or rebuilt parts for these trucks going to be stored for ready replacement so the drivers don’t have to wait around for repairs to be made? Just how efficient is the regenerative braking system and how expensive is the controller to replace?
    I’m sure that there are many more potential short comings to take into account, but these are some of the biggest ones.

    • Smells like they are trying to copy the Tesla scam, sorry, business model.

      • Mobile phone companies ran at a loss at first to. It cost many thousands of dollars to buy early adopter mobile phones when they first came out. Electric cars are a superior product and superior products tend to do well in the long run. Tesla is the first American car that has been any good for years. The oil companies get billions in subsidies and no one seems to care about it. The Koch Brothers are spending a fortune trying to discredit it.
        The first time you drive an electric car you realize how much better they are.

  10. Ha ha ha ha ha ha !

    Thanks for the article Steve. I am very glad that you share my doubts.

    My Fellow Americans,

    We have many absolutely hopeless illusions about the past, present and future of our nation. It’s part of our DNA. One of the greatest is how we are going to continue with “business as usual” in the transportation field. No way in hades !

    Electric vehicles are a lie. “Alternate Energy” is a lie. “Technological” solutions are a lie. Nothing my friends, nothing can replace the 144,000 BTUs in a gallon of oil. Nothing !

    The energy crash is coming, no matter what we do. The only thing that can even remotely preserve some semblance of our current way of life is to go back to small and medium-sized towns clustered around railroads, and to a lesser extent, waterways.

    We need an extensive electrified rail system with a few diesel or even coal lines for the long-distance western routes. An electrified system, like Europe’s, can be run on power from a wide variety (albeit dwindling amounts) of electrical power production sources.

    All this mumbo jumbo and endless hypothecating about electric cars, trucks and trains is absolute pie-in-the-sky, glitter and rainbows. star-spangled nonsense.

    Remember HYDROGEN ? Boy, that sure died a quick death, didn’t it? Totally impractical.

    If the Middle East was nuked tomorrow, the vast majority of Europeans could still make it to work on electric trains and streetcars. Many Americans would never work again. Europe still has most of the early 20th century-type, rail-centered infrastructure in place. It would be a relatively easy transition. America would implode.

    Nothing can beat all the energy-related, financial and mathematical efficiencies of the humble train.
    Let’s all stop dreaming and scheming and start layin’ track !!!

  11. One more concern is transferring all that power to the asphalt: there will be tremendous rubber wear on the drive-axles.

  12. Next leg up for oil is $75.

  13. More efficient hybrid cars… Does anyone know if say 15% percent of all trucks and cars were using this technology, if there would be any shortages in some of the respective metals that are used (esp. for the battery)? At 30% ? I’m no expert in this field, but my gut feeling is, that on the supply side there could be severe shortages looming, which would – cost-wise – likely become a huge negative for the future of this technology ? But as Steve rightly points out, the EROI of energy extraction itself will be the spanner that may well stop the wheel of technological progress.

  14. well, unless theyve repealed the laws of physics, Id like to know how it stops twice as fast as a normal 18 wheeler,

    the brakes on any 18 wheeler are capable of locking up the tires against the pavement,

    and how do they know the acceleration times and stopping times?
    clearly they dont even have a prototype on the road, since the picture is a cartoon drawing.

    every truckstop has diesel,
    the locations with CNG that a 80 foot ling truck will fit into are , umm, well they dont exist except at a few urban bus maintenance facilities.

    and if something breaks down, how long is your truck (and freight) going to be sitting ?
    any diesel mechanic can repair a normal 18 wheeler.in a few hours and have it back on the road.

    but I can tell you that the new fedgov emission regs have actually caused the 18 wheelers to consume MORE fuel.

  15. Steve
    At least you are consistent on negative views of any new technology. Yes this one one has warts but the one I sent you last year via email was also dust-binned but without any research on your part instead w the response saying we are all screwed because of peak oil and technology will not get us out of this dilemma.
    I do hope u have lots of ammo and can stay awake 24×7. Just a matter of time out in the country.

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