Anheuser-Busch orders up to 800 hydrogen-electric Nikola semi-trucks

Beer giant Anheuser-Busch Co. LLC said today it placed an order for up to 800 hydrogen-electric powered semi trucks from Nikola Motor Co. and will begin using some of the electric vehicles before the end of the year.

In announcing the largest deal to date for heavy-duty trucks powered by hydrogen fuel cells, St. Louis-based Anheuser-Busch cited the Nikola One trucks' range of 500 to 1,200 miles per refueling stop, 20-minute refueling time, and zero-emission operations. Anheuser-Busch is a unit of Belgian brewer InBev.

Anheuser-Busch plans to integrate the full order into its dedicated fleet by 2020, replacing all of the 750 to 900 vehicles in that fleet by 2025, Ingrid De Ryck, vice president for procurement and sustainability at Anheuser-Busch, said in a conference call with reporters. The company uses its dedicated fleet to move one-third of its total U.S. over-the-road shipments between its brewery and wholesale networks, De Ryck said. This represents about 12.5 billion 12-ounce cans per year, she said.

Depending on the terrain and load size, a Nikola One truck can travel 100 to 200 miles on its battery alone, a Nikola spokeswoman said. However, each vehicle carries a hydrogen-powered fuel cell to automatically re-charge its battery pack as it travels. That fuel cell requires refueling every 800 to 1,200 miles, she said.

Salt Lake City-based Nikola did not disclose the value of the order, though published reports pegged it as high as $720 million. The vehicles would be less expensive to operate than diesel trucks on a dollar-per-mile basis, Nikola CEO Trevor Milton said on the call.

Nikola leases its vehicles at a rate of 90 cents to $1 per mile in a package that covers the vehicle, fuel, warranty, and maintenance. It also includes replacement parts such as tires and wiper blades. Its leasing arrangements are managed by rental and leasing giant Ryder System Inc., which serves as Nikola's exclusive distribution and maintenance provider.

Today's announcement comes five months after Anheuser-Busch placed an order for 40 electric semi-trucks from electric vehicle producer Tesla Inc., a rival of Nikola. Tesla's trucks, which are set to begin production in 2019, have 300-mile and 500-mile ranges per charge. Fully electric trucks require a stop of one to four hours to fully recharge their large batteries, De Ryck said.

Anheuser-Busch will not favor one type of vehicle over the other, De Ryck said. "We see both solutions as complimentary," De Ryck said on the call. "We have thousands of routes, with very different distances, so both can co-exist with their own roles."

Another contrast between the two alternative-fuel technologies is the infrastructure required to fuel the trucks. Fully electric vehicles such as the Tesla Semi require specialized electric stations to recharge their batteries, with more powerful "Supercharger" stations providing a faster charge. In contrast, Nikola's trucks refuel by filling their tanks with compressed hydrogen fuel obtained from specialized stations. There are only about 30 such sites across the U.S., but Nikola has contracted with the Norwegian firm Nel ASA to create a nationwide hydrogen refueling network that will operate more than 700 hydrogen fueling stations by 2028, with 30 coming on line over the next two years, Milton said.

Nikola plans to defray the cost of building its refueling network by opening the stations to all vehicles, including private cars and commercial trucks, he said. The company, which will announce the locations later this year, said the stations will be situated on freeways just outside large cities. This is similar to the locations of the leading truck stops like Love's Travel Stops & Country Stores, Pilot Travel Centers LLC's Pilot Flying J, or TravelCenters of America's TA-Petro, he said.

Instead of shipping hydrogen to those stations, Nikola will generate the fuel on site, tapping into renewable power sources such as wind, solar, or hydroelectric to perform electrolysis, a process that uses electricity to split water into its chemical components of hydrogen and oxygen.

Self-driving technology could also be a differentiator between the Tesla and Nikola platforms. Tesla has promoted the improvements in safety and efficiency it says will be provided by "enhanced autopilot" features, which use a suite of surround cameras and onboard sensors to provide object detection, automatic emergency braking, automatic lane keeping, and lane-departure warning, the automaker says. Tesla also says its trucks are capable of operating in platoon mode, a strategy of improving aerodynamics and fuel efficiency by allowing multiple trucks to draft in quick succession, using precision telematics and wireless communications to follow a human driver in a lead vehicle.

Nikola trucks will ship with radar, camera, and lidar sensors—the latter a detection system that works on the principle of radar, but uses light from a laser—that are required for autonomous driving, Milton said on the call. But the company will wait to deploy those advanced features at a Level 5—or fully automated—level until it gains greater clarity on legal approval of self-driving cars, he said.

"Autonomy and platooning are really fun to dream about, but they are still speculative because they rely on changes to regulatory and safety issues," Milton said on the call. In the meantime, Nikola trucks will offer basic driver-assistance features such as automatic braking and lane control in a bid to improve safety. "When a truck wrecks, it wrecks everything in its path. And one driver fatality is too many," he said.