Dive Brief:

• Total Transportation Services, a firm in California that services the ports of Los Angeles and Long Beach, signed a letter of intent to order 100 battery-electric vehicles and fuel-cell-electric vehicles from Nikola, the OEM announced Thursday.
• But in its efforts to scale, Nikola continues to face supply issues, including with batteries. Nikola's battery suppliers are still constrained and aren't yet making commitments for 2022 supply. The OEM has secured enough supply to finish between 50 and 100 Tre BEVs this year, Nikola CEO Mark Russell said during the company's earnings call Friday.
• Delivery is subject to vehicle trials, as well as whether and when Total Transportation Services can get funding help. Nikola CFO Kim Brady said on the call it was helping to secure government subsidies to help bring the price down. But the goal is to deliver the BEVs next year and start delivering the FCEVs in 2023.

Dive Insight:

Nikola is focused on scaling — production and infrastructure. But, as other OEMs have also experienced, supply shortages are causing headwinds on the former.

"We are looking, of course, for chips, touch screens; there are potential shortages of a number of different parts at this point," Russell said during the call.

Supply chain struggles were a theme on Nikola's previous earnings call. In February, Russell lowered delivery targets for the Tre BEV, citing tier 2 and tier 3 disruptions. But Nikola continues to build out its plant in Coolidge, Arizona, in phases so it can ramp up production.

By the end of phase 1, capacity should be up to 3,000 units, Brady said. Phase 2, which will start in early 2022 and be done by the end of the year, should bring capacity up to 15,000 units. By the end of 2023, capacity should be at 35,000 units. So, Nikola should have enough capacity to handle the 1,200 BEVs to which it has committed to build in 2022. 

Nikola is currently looking for Tre BEV launch customers, aside from its deal with Total Transportation Services. The OEM recently held an event in which 25 fleets came to kick the tires, and those conversations are ongoing, Russell said.

Only up to 30 of Total Transportation Services' Nikola trucks would be BEVs. The rest would be powered by hydrogen. The firm needs to run at least two full shifts every 24 hours, which requires a vehicle that can more quickly re-power, Russell said. Nikola's fastest battery recharge time is about 99 minutes, while its hydrogen truck can refuel in 10-15 minutes.

Nikola's goal is to supply 100% of the trucks it delivers with access to its hydrogen fuel. In late April, the company announced its Nikola Energy division would collaborate with TravelCenters of America on two hydrogen fueling stations.

The stations will be built at two existing sites in California, serving customers in the greater Los Angeles area and north through the Central Valley. They are slated to be operational by Q1 2023. 

Nikola also has a 1,000-ton dispensing station at its Phoenix headquarters, and it plans to build a hub facility between it and the Southern California locations. Next on the list: The Bay Area.

"We'll be doing that same thing, delivering the trucks and the fuel synchronized, as we move to other city pairs and other geographies around the country," Russell said.

FCEVs and BEVs share the common need for service centers, which Nikola is also tackling. In early April, the OEM announced a partnership with Rig360 Service Network.

The maintenance provider is set to provide sales and service products for the OEM's entire Class 8 portfolio at more than 65 dealer locations throughout the Southeast, Midwest and Northeast. Rig360 facilities are "ideally located" in important metropolitan areas and major interstate intersections, Russell said. 

Russell said Nikola is looking to add partnerships with other dealership networks elsewhere in the country. While the partners hire sales people, they're also training technicians in cooperation with the OEM.

"Service and maintenance are key points for our fleet customers, and they expect reliability and uptime from these vehicles," he said.