Transportation of the Future with Mark Russell

September 15, 2020

John Shegerian: This edition of the Impact podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy. It is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com.

John: Welcome to another edition of the Impact podcast. I’m John Shegerian, and I’m so honored and excited to have with us today Mark Russell. He’s the CEO and president of Nikola Motor. Welcome to Impact Mark.

Mark Russell: John, thanks for having me excited to be here.

John: Oh, man, you are the hot guy. You are the guy that everybody wants. We are so honored to have you today. I know how short time is right now for you being in high demand to give what’s going on with Nikola Motor and there is some great announcements you’ve made in the last days or so before we get going into that. Can you just share a little bit of the Mark Russell Journey? How did you even become the CEO and president of Nikola Motor? And how did that all come about?

Mark: Well, it is a kind of a long story but it goes back to the beginning when– I am a lawyer by training actually. I practice law for a while back in in the 90s and it was not until I had a client who challenged me to take a non-legal role that I even consider doing something else.

John: No kidding.

Mark: I took a look on legal role about 24 years ago and I have never looked back. I’m sorry. Never became a lawyer, you know and I saw that is taking a big risk at the time, but I thought you know, what’s the worst that could happen? You know I could fail and I go back to being a lawyer. And my first exposure to what I call the entrepreneurial proposition, which is what is the worst that could happen and if that is acceptable why not try it, you know. And that’s the entrepreneur proposition and I have been following that entrepreneurial proposition now for 24 years and is taking me further and further to the utility cutting-edge. So and now you have to say I never dreamed it would go this far as it has that now we are on the you know, we are on the cusp of having a legitimate shot to change the world and help create a brighter future for all of us.

John: Well, you are definitely the cool guy, you know, we do cool things here at ERI, but all my young employees that work here that make this brand so cool. They just– they heard about you coming on impact today and they were so excited. They just were blown away that you were coming on to tell the story of Nikola Motor. I’m on your website now for our listeners out there to learn more about your amazing Badger and all the cool things you’re doing they could go to www.nikolamotor.com. Mark, you became the CEO president in February of nineteen, but things are happening in the last days in the last months, can you talk a little bit about you know, really what Nikola is about and your company and your mission.

Mark: So the roots of Nikola go back to before the founding. Trevor Milton and I started working together back in 2013. coming at, you know, coming out of the recession and I guess it was 2014 that we actually purchased a company that Trevor had found previous to Nikola. He founded a company called DHybrid systems. It made natural gas systems for heavy trucks. Natural gas fuel systems for heavy trucks. His company before that which didn’t end up lasting for the long haul was just called DHybrid. And then he did a DHybrid systems. DHybrid was just about blending natural gas into a diesel engine and then DHybrid systems was about a pure natural gas system for a heavy truck. And he started buying pressure cylinders from the company I was working at and helping to lead previously which is company called Worthington Industries, and they even– one year became my second-largest customer for those kind of heavy heavy-duty natural gas fuel tanks were onboard fuel storage for natural gas vehicles. And I said, “who are these guys?” and they said, well they are small news new company out west and they don’t need system. It’s really gaining market share.” So I said I’d like to meet him that’s when I met Trevor seven years ago and a few months later, we bought that company and then Trevor not too long after that said what I really want to do now is help create the commercial transportation system of the future, the truck of the future and if you are smart, you will back me but either way, I’m not working for you anymore. I am going to start this other company. When I met him, he was–he was had a start-up going already and then we bought that from him and then he started Nikola right after that and we have wheels back him. So he pulled– he plugs some of his money in from the previous transaction, we plugged a little bit in and provide some incubation services and then we were Off to the Races and it’s been an incredible ride.

John: Go ahead and let us hear about it.

Mark: It continues to be an incredible ride because it gets– from the beginning, it was a big dream, an ambitious idea. But it’s gotten just even bigger than that. We now believe that we have got a legitimate shot to be a significant producer of battery electric vehicles in the heavy trucks big commercial transportation. And now in the passenger vehicle space with our pickup truck the badger. And then in the grand scheme of things, helping to solve one of the toughest parts of that equation, which is the heavy long-haul business. The heavier something is, the party you have to haul, the more a challenge it is to do that with just a battery powering electric motor. So that is where we came up with our fuel cell system and the hydrogen fueling networks that we are starting to build to fuel it and this bundle decent heavy truck where we provide you with a truck, we give you the fuel, we give you the maintenance. If you have got a driver and you have got a load of something to haul a long distance, then we can provide Freight as a service to you almost and that is really super exciting and we have continued to build a new kind of an ecosystem of partners and suppliers. That is one thing that from the beginning has been a loadstone for Nikola is we were looking for partners. We are looking for help. We are trying to team up with people and so even our competition.

John: Yeah.

Mark: On the stands for the fueling infrastructure for the hoses, the nozzles, the receptacles. We have teamed up with our partners to come up with a standard. We are talking about companies like Toyota and Hyundai, Air Lockheed, and industrial gas. Shell on the petroleum side Energy company. We have teamed up with those folks and may inform the Consortium to standardize things worldwide so that you can, you know, you have a standard way to fuel hydrogen fuel-cell heavy-duty vehicle around the world. We agreed on a standard in December with those folks and we all agreed to go that same direction and companies we teamed up to help develop our technology like Bosch and Wabco and Nell and Mala and Meritor and now General Motors. General Motors and being the most recent one we partnered up with to do all this and there’s a lot of things..

John: and I want to come, I want you to go into that a little bit more of– talk a little bit about that culture. This is something you have learned and evolved in terms of– you have publicly announced your collaborative and partnership spirit in every public interview you have done which I loved because it just shows how open you are and it’s not all about just you and it’s just not all about Nikola, how you love to collaborate. Is that something you brought to Nikola from all your other Ventures that you’ve led in the last 24 years since you walked away from lawyering?

Mark: Well, certainly something that I’ve learned and I have to give great credit to my former company Worthington and where I worked for 12 years. Worthington does a great job with joint ventures has– have a number joint ventures that lasted a long time, and gotten very significant. There’s a several of them that are really notable and that helped teach me the power of partnership and as far as Trevor that you know, that’s the founder here. He has a great gift in, you know, in being willing to take an entrepreneurial risk, but also in creating Partnerships and collaborations. He’s really unique that way, you know, every entrepreneur has to have a vision of the future that motivates them to take a risk and to persist in the obs– you know obstacles and even temporary failure. Trevor has that. But he also has the self-awareness to know that you’re more likely to succeed as a team than you are as an individual.

John: Right.

Mark: And particularly when you’re trying to change the world. You’re trying to change the world. That’s a tough lift for one person. You know, you can– Archimedes said I could lift the– I lift the whole world if you give me a not long enough lever and a place to stand but he didn’t mention that it that by himself. He still would move it very far with that kind of length of welcome.

John: I love that quote. I love it. I love it. It’s just great to be so collaborative. And that’s just a great lesson for young entrepreneurs that are getting inspired by you. I mean, I already know that you’ve captured the minds and the hearts of all the young people that work for me. And obviously that goes way beyond that because of all the publicity you’re getting and the fact that you’re so open about that. I think that’s just a great lesson that you’re teaching the Next Generation behind us.

Mark: Well, and how cool is it that we get a chance here to help create the world of the future that could be sustainable, you know, and we use batteries to store renewable electricity and move things around and we use the breakdown of water. The store electricity and move things around how– that’s really an elegant solution by the way. You take water and you break it into its parts to store energy, and to get it back you just make water again. It’s really elegant that you can repeat it a million times no problem. And if that turns out to be a key for the future sustainable clean economy, then how cool is that to be part of making that happen and do it with cool products along the way.

John: Listen, I’m like, yeah, it’s not like I cut you off earlier. I want you to go into the amazing announcement you made yesterday with GM?

Mark: So this was really a really a cool thing. So the– we actually started talking to General Motors about fuel cell technology long before we ever started talking about doing a vehicle together. And because they have a really neat fuel cell collaboration that they have been doing for several years now with Honda. Honda has been working on fuel cells a long time. GM’s been working on fuel cells along time. They brought their technology together into a joint venture and they have a really cool fuel cell system that they’re about ready to mass-produce. And because of that and we’re looking for you know, everybody who’s good at this around the world. We want to compare notes with them at the very least collaborate if it makes sense and so we went to them and said, “Hey, let’s talk about fuel cells”, and they gave us a fuel cell to test, a fuel cell stack we could put on a test stand and test or anxious to do that with anybody who will let us. Their fuel cell stack tested out really efficient and long Live. And we started talking about fuel cells and then in the middle of all that, Tesla came out with their cyber truck. Which a lot of people love the Cyber truck and we wish Tesla every success.

John: Right.

Mark: We think they’ve done great things to help move the world toward a sustainable future and we wish them every success. People want to make us Rivals, but there is room for both of us to succeed and many others frankly. It really change the world. But that– a lot of people love that cyber truck. They had a lot of you know, they had a lot of orders for it. But I– you know at first I didn’t like it. I’ve been driving a pickup truck since I was 16 years old, I grew up in the American West and I’m a pickup truck driver. I have one today and I said I said, “that’s not a truck I would buy”, and so Trevor said, “hey, we’ve got the design guys have come up with a concept for a pickup truck just for fun: and said “let’s just throw it out there.” So we threw it out there and said, “hey, here’s a pickup truck you could build”, and in the Tweet, Trevor even offered a deal on and say “you can have this if you want. We’ll build a pickup truck the people think looks cool.”

John: Right.

Mark: Actually, some people think the Cyber truck looks cool but kind of in a futurist.

John: Right. I get what you mean.

Mark: Yeah and ours is much more traditional looking more like an advanced version of the cool pickup trucks that are out there today. People kind of went crazy over it so much so that we got I think almost 90,000 people raising their hand and filling out a form online on our website. We have put a fill on the website said people so interested in we put a form on the website said that ” if you’re interested in this thing, fill out the form and we’ll keep you informed of what we’re planning to do” and we had almost 90,000 people just do that real– in a fairly short amount of time. I think we had– it was really fast that we got many that many people and that caught the attention of a number of OEMs who said, “hey, we could build that for you” and we said, “well, that’s interesting because we probably– we’re not going to do this on our own. Our primary business is the heavy truck and the fuel cell system and the Hydrogen supply chain”, and we said but we– did somebody helped us we probably built us– build it, you know back to the partnership idea and that point, you know GM start saying, “hey, we could build that for you. We’re going to– we’re tooling up to build electric vehicles and we’re going to have them, you know, we’re committed to having the best batteries in the world, the best fuel cells in the world and the best production fuel in the world for these things and for passenger cars, and if you want to, you know, let’s talk about building the badger”, and so we added the badger to the equation and we were talking about their battery systems that they’re doing with LG. The bullets interesting. Both of these things are Partnerships that we are really interested in likewise. We’re interested in the Honda GM Tech for on the fuel side. We’re interested in the LG GM Tech on the battery side. And then we’re just collaborating how right on manufacturing of the pickup truck the badger.

John: Wow.

Mark: So all this card coming together and we start adding up the value that it would be to us to do something truly and as a partner here. And they added up the value of you know if we had given them increased scale and increase volume and give them a share in the company that– so we ended up, each of us getting you know, several billion dollars more value than the actual stock that we trade in change hands here. And so that’s how that ended up. We talked to lots of different OEMs. But in the end, GM was by far the obvious choice because we have the additional Synergy of their collaborative partnership on fuel cells with Honda and the additional Synergy of the collaborative partnership they have with LG on batteries. It was really exciting and cool.

John: And what is also cool is that you’re the hot company? You’re the cool kid on the Block and you get to work with a hundred-year-old iconic legendary brand and bring them into the future with you now.

Mark: Well, and isn’t it cool that we get to do that we go further together. You know, they have a lot that they bring to this party and what they lack, we can bring to the party and it is just exciting because it helps them it helps us. It’s really really exciting.

John:I know you also– I read about five or six weeks ago about your really cool partnership with Republic Services. Can you share with our listeners about your partnership with Republic Services as well?

Mark: Absolutely, so that one started because the– one of the cutting edges of zero emissions and carbon emission reductions is the waste industry and that’s because people you know, this industry operates in urban and Suburban areas where lots of people live and people have been demanding through their elected officials that they that they stay clean up this process. They don’t want smelly dirty diesels in their neighborhood and smelly dirty noisy. They want them to be less smelly, less dirty, less noisy, and less and more sustainable. You know that people are more recycling more than ever and they want this to be part of the recycling Loop and to not be part of the political. So the segment of the heavy truck industry that has been leading the march away from carbon emissions and pollution generally has been the waste collection industry, you know, they’ve come they converted almost all of their vehicles and most of a lot of the major metropolitan areas around from diesel to natural gas, which is cleaner burning and is more efficient and better for the environment. And their goal so going to lead in the change from natural gas to zero, you know, using using batteries or maybe in some cases yourself within batteries award for most of these applications because pick– because trash trucks can return to base overnight and charge slowly there with a battery. So and they don’t need to go, you know hundreds and hundreds of miles during the day and they stop and start a lot which is a great application for regenerative braking for batteries. So we think that that we thought that that was going to go batteries and since we and since we came up with a really cool battery-electric heavy truck that is already, you know, it’s sister or rather predecessor design as the Iveco S Way. There’s a version of that vehicle and its predecessors that is used for Waste for collection and so in many parts of the world, so there’s already an existing application of that same platform to the waste collection industry. And since we collaborate with our partner there Iveco, and coming up with a battery-electric vehicle that was based on the same parts bin as their Iveco S Way which was just came out last year in July. New– one of the newest diesels in the world and probably one of the last new diesels in the world because nobody’s going to be working on new ones of those going forward that it make just perfect sense to go to the waste industry and say, “you know, if you want to go from– you went from Diesel and natural gas, if you want to go from natural gas to to our right zero, then we can provide a solution for you” and Republic which happens to be headquartered here in the same city that we’re headquartered in here in Phoenix, Arizona that we just got to know those guys really well, even on a personal level and they have such commitment to this.

John: Yeah.

Mark: That it started to just make powerful sense. And I said look if we partner up on this so that you help us then we can kind of come up with a solution that could be the model for the rest of the industry, rest of the world frankly of being able to make refuse collection zero-emission and sustainable and they embrace that with such enthusiasm and with such commitment that it was just a no-brainer to say let’s convert. Let’s convert your Fleet and let’s come up with a plan to do that. And then you can also help us design the truck and so that we can get a design that we know will work in this industry really well And so that’s how that came to pass that Republic had such a commitment and enthusiasm for doing that and leading the way and we had the beginnings of a solution that was close enough that once we started collaborating, it was clear that we could do that quickly and relatively simply and together. So we’re looking forward to showing the world how you can convert, you know an entire city to zero emissions and all of their recycling efforts and waste collection and in cooperation and partnership was Republic.

John: Another great company, another great brand and you’re collaborating again. Mark, I would ask questions. One, you know, I’m on your side again for our listeners out there. It’s www.nikolamotor.com. Nikolamotor.com the motor singular. It’s a great site, tons of information and I– makes me want to like get behind the wheel of the badger. Well, how long until– give me a little bit of a crystal ball? How long until I’m sitting behind the wheel of a badger? Is it a year? Is it two years? What’s your– what do you foresee?

Mark: We think we could we could get you a badger in 2022.

John:Oh, that’s going to be so exciting that’s all..

Mark: You know, you have to wait a little bit. But if you’re willing to wait and you want to go in and and by the way with the announcing what you brought the reservation price, the price down to a hundred dollars so you can you can get your place in line right now with $100 deposit. The cheapest way to do it before it was 250. I hire graduates and you know, we have higher versions of that and we also let out a thousand reservations at 5,000 a piece for people who wanted to be VIP treatment in the queue.

John: That is awesome.

Mark: So that’s also, at Nikola World, we’re going to unveil the badger at an advance and if COVID allows, it will be on December and those folks are going to get a special behind-the-scenes pass to that. But you can reserve your place in line for a badger for 400 bucks to go on the website. You can do a real quick. It doesn’t take very long and for a hundred dollars, we will put you on the list and we’ll get you a badger as soon as we possibly.

John: Hey two things Mark. I hope I get– I would love to come to Nikola World whenever you have it whenever it makes sense, and we’re allowed to have those kind of events. I’d love to come there and with two minutes left, share with our listeners the future. You’ve already told us about two amazing Partnerships with GM and Republic Services. Can you share a little bit about what the future years ahead look like for Nikola?

Mark: Well, in the near future, I think what you’ll see us do in line with our philosophy and culture is what you’ll see as partner up with somebody in the hydrogen infrastructure space. We have a huge challenge ahead of us to make sure that if you have a hydrogen fuel version of the badger, the home built and we’ll put you on with a battery or of with a fuel cell into a hydrogen the hydrogen one will go twice as far, it’ll be more expensive and then you have to also make sure that there’s a place for you to fuel and that’s what we’re focused on is make sure our customers have places to fill these vehicles up with hydrogen and we’d like it to be clean hydrogen, you know made from renewable electricity. So we have a huge challenge ahead of us on that front. We’ve already built a station here in our headquarters and has the ability to dispense up to a thousand kilos of hydrogen a day, that makes it the largest dispensing station that we know of here in the Western Hemisphere. There’s one that is slightly is slightly larger Mark,000 tons a day. We understand is in southern China but ours is the biggest one in the Western Hemisphere and the next one we build will be even bigger than that. Bigger than anything out there and we have a lot of building ahead of us. We’ve developed a station design and infrastructure that can be mass-produced now standardized around the world. And anybody, anybody’s vehicle should be able to fuel there will be standard infrastructure that we’ve agreed on with the other industry players that we’ve consorted with and we we you know, that’s a that’s an area where we think it’s right for partnership. So I think you’ll see us announce that we’re going to do something in partnership with somebody to build hydrogen stations and infrastructure for distribution of hydrogen.

John: Wow.

Mark: So that’s coming up. From there, you’ll see us finish up our our Factory conversion in Germany. We are just about done converting the factory we’re using in Germany to produce Vehicles. It’s in the city of Om between Stuttgart Munich and that that that’s an existing facility that we’ve converted for– to produce electric and Fuel Cell Vehicles. That’s almost done and we’ve just broke we just broke ground a few weeks ago on our facility in Henering, Coolidge Arizona that is Southeast of phoenix that the green filter sylheti where we’ll be producing Vehicles there and then of course, we’ll be announcing along with our partner John motors, which me, which facility that would be a facility that that is in the General Motors footprint today that will be converting for for producing the Nikola Badger. So those are that’s a series of things that are coming down the pike for us and if we think about gigs to gets us on the way to what we’re really trying to do which is help save the help save the planet make it a sustainable place for our for our descendants.

John: You know, Mark, you have so much going on. Please promise me that as these announcements come out in the months and years ahead that you’re going to join us again on the impact and keep sharing with our listeners all the great things yo are doing.

Mark: Happy to do that and consider yourself invited at Nikola World. Hope to see you there and would love to come back on and talk. Thanks for the great service you do and helping spread good ideas and get people connected to good ideas around the world.

John: Listen, he’s Mark Russell. He’s a CEO and president of Nikola Motor. You can find him at nikolamotor.com. Mark, with the with me sitting in the middle of California and fires burning to the north, the East and the south of me. There is no greater time than to have a really nice person and it’s really nice for our young entrepreneurs out there to hear how nice guys can finish first. To have you during this very busy time while you’re scaling this company and being dragged in a lot of directions to make public announcements and be on major media networks for you to come on the impact today. This is exactly why I do this show, I’ve been doing it 13 years. It’s with total honor and gratitude that I say thank you for coming on today. Thank you to making the mission of transforming the transportation industry and improving the lives of all of us and making the world a better place. Mark Russell, you are making the world a better place with Nikola Motor and I’m just so grateful you came on the impact podcast today.

Mark: John. Thank you so much for inviting me. It was a pleasure.