Iveco has made a surprising and daring decision: It has taken over the ownership of Nikola in Europe, effectively becoming the sole owner of the joint venture. This means that Iveco will fully control the development, production, and distribution of Nikola’s hydrogen and battery-electric trucks in the Old Continent.
Why did Iveco do this? And what does it mean for the future of zero-emission commercial vehicles in Europe? Let’s take a closer look at this deal and its implications.
The Background: A Rocky Partnership
Iveco and Nikola announced their partnership in September 2019, intending to create a new company called Nikola Iveco Europe to produce hydrogen fuel cell and battery electric trucks for the European market. The deal was seen as a win-win for both parties: Iveco would gain access to Nikola’s cutting-edge technology and design, while Nikola would benefit from Iveco’s manufacturing expertise and network.
The partnership seemed to be going well at first, unveiling the Nikola Tre truck prototype in December 2019 and the groundbreaking of a new factory in Ulm, Germany, in September 2020. The plan was to start production of the battery-electric version of the Nikola Tre in 2021, followed by the hydrogen fuel cell version in 2023.
However, things turned for the worse in September 2020, when Nikola was accused of fraud and deception by a short seller report claiming that Nikola had lied about its technology and achievements. The report triggered a series of investigations by regulators and a drop in Nikola’s stock price. It also led to the resignation of Nikola’s founder and executive chairman, Trevor Milton, who was later indicted on three counts of fraud by federal prosecutors.
The scandal put a strain on the relationship between Iveco and Nikola, as Iveco’s parent company, CNH Industrial, had invested $250 million in Nikola as part of the deal. CNH Industrial also faced pressure from its shareholders and analysts to reconsider its involvement with Nikola, especially after General Motors scaled back its own partnership with Nikola in November 2020.
The Deal: A Bold Move by Iveco
Despite the challenges and uncertainties, Iveco decided to stick with Nikola and take over its ownership in Europe. On December 21, 2021, CNH Industrial announced that it had reached an agreement with Nikola to acquire Nikola’s 50 percent stake in Nikola Iveco Europe for €100 million (about $113 million). The deal was completed on January 3, 2022, making CNH Industrial (and, by extension, Iveco) the sole owner of Nikola Iveco Europe.
According to CNH Industrial, the deal was motivated by its commitment to accelerate the transition to zero-emission commercial vehicles in Europe and its confidence in Nikola’s technology and products. CNH Industrial also stated that it would continue to collaborate with Nikola on technology development and supply agreements and maintain its equity investment in Nikola.
The deal gives Iveco full control over Nikola Iveco Europe’s operations, assets, and intellectual property rights. This means that Iveco will be able to decide on the strategy, direction, and pace of Nikola’s truck development and production in Europe. It also means that Iveco can leverage its expertise, resources, and network to support Nikola’s truck sales and service in Europe.
The Implications: A New Era for Zero-Emission Trucks in Europe
The deal marks a new era for zero-emission trucks in Europe, as Iveco becomes one of the leading players in this segment. Iveco has already established itself as a pioneer in alternative fuels for commercial vehicles, offering natural gas, electric, and hybrid models. With the addition of Nikola’s hydrogen and battery-electric trucks, Iveco will have one of the most comprehensive and diversified portfolios of zero-emission solutions for different applications and customer needs.
The deal also gives Iveco a competitive edge over its rivals, such as Daimler, Volvo, Scania, and MAN, who are also developing their own hydrogen and battery-electric trucks for Europe. By taking over Nikola Iveco Europe, Iveco will have access to Nikola’s proprietary technology, such as its e-axle, which integrates the electric motor, transmission, and differential in one compact unit. This technology reduces weight, complexity, and maintenance costs while increasing efficiency and performance.
Iveco will also leverage Nikola’s hydrogen expertise and network, including partnerships with key players in the hydrogen industry, such as Nel Hydrogen, Bosch, and Hexagon Purus. Nikola has also secured access to renewable hydrogen production sites across Europe, ensuring a low-carbon and cost-competitive fuel supply for its trucks.
Iveco’s takeover of Nikola Iveco Europe is a bold move for the company and a strategic one for the European truck market. According to a recent study by Transport & Environment, hydrogen, and battery-electric trucks will be cheaper to operate than diesel trucks by 2030 in most segments and regions in Europe. The study also predicts that zero-emission trucks will account for 60 percent of new truck sales by 2030 and 100 percent by 2035.
To meet this growing demand, Iveco plans to ramp up the production of its Nikola Tre trucks at its Ulm factory, which has a capacity of 10,000 units per year. The first batch of battery-electric trucks is expected to be delivered to customers in 2022, while the hydrogen fuel cell trucks will follow in 2023. Iveco has already received orders from several major fleets, such as Anheuser-Busch InBev, IVECO Magirus AG, Hamburg Port Authority, and TotalEnergies.
The Verdict: A Smart Bet by Iveco
Iveco’s decision to take over Nikola Iveco Europe may seem risky at first glance, given Nikola’s troubled past and uncertain future. However, upon closer inspection, it is actually a smart bet by Iveco on the potential of zero-emission trucks in Europe. Iveco has gained full control over a promising technology partner that can help it achieve its sustainability goals and gain a competitive advantage in the market. Iveco has also shown its confidence and commitment to Nikola’s vision and products, which may help restore Nikola’s reputation and credibility.
Iveco’s takeover of Nikola Iveco Europe is a win-win for both parties: Iveco will have full access to Nikola’s technology and network, while Nikola will benefit from Iveco’s manufacturing expertise and network. It is also a win for the environment: By producing and selling more hydrogen and battery-electric trucks in Europe, Iveco and Nikola will contribute to reducing greenhouse gas emissions and air pollution from the transport sector.
Iveco’s bold move may prove to be a game-changer for the European truck market. By taking over Nikola Iveco Europe, Iveco has positioned itself as one of the leaders in zero-emission commercial vehicles in Europe. It remains to be seen how its rivals will react to this deal and whether they will be able to catch up with Iveco’s innovation and ambition.