Russell discussed the company's recent groundbreaking of its Arizona production facility, its current production timelines, and how they pitch their hydrogen fuel cell trucks to businesses.
Arizona Manufacturing Update: Nikola already guided for its Arizona manufacturing facility to complete its first phase of construction in 2021. While the company expects to complete all three phases of production in 2023, it can start limited production of trucks as soon as next year, the CEO said.
Navigating COVID: The global COVID-19 pandemic has impacted the production of the Nikola Tre in Germany, the CEO said. Production was shut down in March and reopened in June with strict health and safety rules in place that limited productivity.
"We were hoping to start production next summer, and we'll probably have to move that to the right just a bit. I'm not sure how much," he said.
Russell added that they will update the public once it's clear life is returning to normal, but he's encouraged by the fact that the workers at the German plant have forgone their August vacations to make up for lost time.
Production Prototype: Russell said the first production prototype for the Nikola Tre will be on the test track in "in the next six weeks or so." He also confirmed the need to raise more money in the coming years to finance their production. Nikola's total fundraising activity for 2020 will come in at just under $1 billion.
Watch to the full interview with Nikola CEO Mark Russell in the clip below, or listen to the podcast here
Winning Market Share: Nikola's business model involves a bundled lease strategy, in which their trucks are packaged with the hydrogen-powered fuel for seven years or 700,000 miles and leased to multi-national corporations in need of long haul trucking.
"We're going to give you that at a price that's probably at or better than your current total cost of ownership for your diesel fleet," he said.
The challenge, however, is controlling costs. Building out a hydrogen fuel infrastructure is expensive—it's one of the main reasons the technology hasn't become mainstream yet. But Russell said they've taken steps to control costs by creating a standardized station design and securing long-term supply agreements that lowers component costs.
Stock Commentary: Since Nikola's reverse IPO was announced in March, shares of Nikola have rallied from $10 a share to as high as $93.99, though they've since fallen back to $32.
That tremendous rally has created a legion of Nikola enthusiasts and just as many skeptics who argue the company is massively overvalued. Russell agreed it's difficult to place a value on the company right considering it has no revenue.
"It is tough [to value] unless you're looking at the long term. And that's what I'm looking for, investors who want to buy into our long term vision and are willing to buy us and hold us. It's really tough to value it on the short term unless you're speculating and day trading it. So we're looking for people who will buy us and hold us, and see if we do what we say we'll do."
PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET Benzinga's YouTube channel, and the podcast is on Spotify, iTunes, Google Play, Soundcloud, Stitcher and Tunein.