This week, electric truck maker Nikola announced that it is equipping its electric and hydrogen-powered vehicles with PlusDrive, the highly automated driving platform from Plus (formerly Plus.ai). I follow Plus closely and recently sat down with David Liu, CEO of Plus, for an episode of the Six Five On the Road podcast, which you can watch below.
Plus is a pioneer in self-driving truck technology, and we have already seen it make major moves in the commercial automotive industry, partnering up with the likes of Iveco, Amazon and Nvidia. You can read my coverage of Plus' announcements with Iveco here, Amazon here and Nvidia here. The company is innovating on all cylinders in the highly automated driving (HAD) market, which has the potential to grow from $1 billion to $30 billion annually in the next decade. This growth comes out of the need for innovation in the trucking industry to overcome obstacles that can only be solved with safe and efficient technologies. Let's take a look at what Nikola and Plus announced and why it is such exciting news for the trucking industry.
The current state of the trucking industry
The trucking industry plays a vital role in our economy, transporting 70% of the goods in the United States. Large trucks move the nation's materials and finished products to and from manufacturers, warehouses, post offices grocery stores and countless businesses nationwide. If anything, trucking has become even more important with the advent of e-commerce businesses from Amazon to small shops that rely on UPS or the U.S. Postal Service. However, unlike these businesses, the trucking industry itself has not undergone the digital transformation that would lead it into the next generation of safety and efficiency.
Modern diesel big rigs are about as fuel efficient as you would expect, and their fuel consumption is more comparable to airliners than to consumer vehicles. Trucks are conceptually like cars on the highway, sharing the same road and abiding by the same laws. However, trucks have different challenges than passenger vehicles.
Solving the challenges of trucking with alternative fuel and HAD
Plus is solving these challenges with its PlusDrive platform, which uses AI and HAD to make the driver of the truck more like an airline pilot. Not long ago, I was allowed to try out a PlusDrive-equipped truck, and it was an incredible experience. Once we were on the highway, the truck handled everything from staying centered in the lane to making lane changes, merging, and braking in stop-and-go traffic. This was all while having a driver who was alert to everything going on, but more like a pilot shepherding an airliner than a vacationer driving a car down the interstate.
It was exciting to test drive a PlusDrive-equipped truck and experience all of its unmatched features for safety, fuel efficiency and driver comfort. When I talked with Liu, he said that PlusDrive-equipped trucks are 10% more fuel efficient because of their ability to optimize the truck's braking, accelerating and driving speed. As more PlusDrive trucks hit the roads, they will receive frequent over-the-air software updates for even more efficiency.
Nikola will use PlusDrive for its Nikola Tre battery-electric vehicles (BEV) and hydrogen electric vehicles in the U.S., with the first production models expected to be available by the end of 2024. Nikola is addressing the fuel-economy challenges that trucks face with new and innovative types of fuel. The Nikola Tre BEV has a range of 330 miles and a charging time of 90 minutes (at 350 kilowatts). One advantage of BEVs is that they have quicker acceleration than diesel trucks, as well as regenerative braking, both of which make the vehicle more efficient.
Beyond that, Nikola’s differentiated portfolio of energy sources allows its customers to choose their optimal fuel source. However, these alternative fuel sources come with their own challenges. Batteries add a lot of weight to the vehicle, which could cut into its maximum load capacity, meaning that the truck would carry less weight—and therefore potentially earn less money—than a comparable diesel-powered truck. BEVs also have a higher upfront cost, although they also require less maintenance and have lower fuel costs in the long term.
It is also important to point out that more infrastructure is needed for scalable fleets of BEVs. This is different from the charging infrastructure for passenger vehicles such as Tesla cars, because truck BEVs charge at higher kilowatts. However, infrastructure support is included in Nikola's plans, with guidance and consulting to support the transition to its Tre BEV ecosystem. I believe this is a case of electric truck technology heading in the right direction, and that it’s in line with Plus' focus on employing technologies that we already have.
Nikola's hydrogen solutions are lightweight and carry three times the energy of their diesel counterparts. Even better, the only byproduct of hydrogen vehicles is water. As with BEVs, Nikola's hydrogen solutions must address the obstacle of infrastructure. On top of that, they face the challenge of fuel production. Hydrogen is not produced at scale like electricity is, making it difficult to distribute and use it for trucks across the country. While Nikola's hydrogen solution is superior in many respects to diesel, it has a longer journey to scalability than the company’s BEVs.
Applying these technologies today
I point out this need for electric and hydrogen infrastructure and fuel production because these are the challenges that Nikola is actively overcoming. Our roads and railroads were not built in a day, just like new hydrogen and electricity infrastructure are not going to be built in a day.
I see the adoption of hydrogen and electricity for trucks as a long-term game, and it could take a long time for these new fuel sources to significantly impact the trucking industry. That said, as Nikola builds out its ecosystem of electric and hydrogen solutions, these solutions could become exponentially more affordable. I believe that Nikola’s implementation of PlusDrive, with its benefits of better safety, efficiency and driver comfort, could also accelerate the company’s scalability, especially because Nikola is the first to implement PlusDrive.
Nikola says that multiple fleets, including PGT Trucking and Christenson Transportation, have agreed to pilot the initial Nikola PlusDrive-enabled trucks that will start to be available in 2023.
Nikola and Plus are in it for the long haul, and I believe there are many obstacles that Nikola must still overcome with its alternative fuel source. Nonetheless, Nikola is continuously building out the next generation of heavy trucks, and it now can boast the exclusive first use of PlusDrive as well. In my view, PlusDrive-equipped Nikola trucks are almost a no-brainer.
I am excited to see these new truck technologies on the roads, and thanks to them I believe the trucking industry could see a significant amount of change over the next decade.
Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.