Daimler Truck gathered analysts in Boston this week for a series of business updates often punctuated by the words “in sunny conditions.” The description was less of a hedge on performance than a description of where the global market-leading OEM sees its business heading.
CFO Jochen Goetz explained how the terminology came about.
“The analogy of rainy, fair and sunny goes back to our first Capital Market Day when we said, ‘We are a cyclical industry.’ Obviously our profitability targets depend on how the weather is outside and translated to how the markets are.”
Sunny days
So, on the sunny side, Daimler projected revenue growth in its major markets by 2030: North America and Europe — 10% higher in each; Brazil, up 20%; and India, a whopping 70% improvement as more of the most populous nation on earth industrializes.
Equally bright forecasts for market share by 2030 followed: North America, 40% today to 45% in 2030; India 8% to 14%; Japan 23% to 25%.
Service revenue is expected to grow 50% between 2025 and 2030, made up of service and parts (60%), zero-emission vehicles (30%) and digital services (10%).
Autonomous vehicles — which Daimler is developing through Freightliner, its independent subsidiary Torc Robotics and with Waymo Via — should contribute more than $3.6 billion revenue in 2030, with greater than $1.1 billion in earnings before interest and taxes.
“Sunny is basically what we see in two core markets: North America and Europe,” Goetz said. “On the other hand, due to the fact that we are a cyclical industry, on the lower side where it’s been raining or there’s a thunderstorm outside, we still have decent profitability.”
Weather has no effect on Daimler’s plans to continue as a dominant industry player.
“We know exactly where we want to go,” CEO and Chairman Martin Daum said after two hours of presentations Tuesday. “And we have a clear path of how to get there.”
Battery swapping: An idea whose time has come – or not?
The Daimler Truck and Beiqi Foton Motor Co. joint venture in China is going to work with a supplier to conduct battery swapping in large commercial trucks.
But don’t look for this to spread to other markets where Daimler does business.
“On a global scale, we don’t see a big potential for battery swapping for heavy-duty trucks,” Andreas Gorbach, head of Daimler Truck Technology, told me on the sidelines of Daimer’s Capital Market Day on Tuesday in Boston. “How big the relevance of swapping in China will be is hard to say.”
The Gasgoo website in China reported that Foton Daimler and Aulton New Energy Automotive Technology Co. Ltd. established a strategic partnership on July 6 to jointly promote the rapid implementation of the battery-swapping project for heavy-duty trucks.
Foton Daimler will develop battery-swappable vehicle models based on the GTL platform. Aulton will provide globally leading battery-swapping solutions dedicated to heavy-duty trucks.
Foton Daimler, created in 2020, produces Auman super trucks and Mercedes-Benz-licensed engines. Aulton has more than 3,000 global battery-swapping patents and relevant patent applications. It claims to be able to change out a passenger vehicle battery in 20 seconds and a commercial vehicle battery in 40 seconds.
Battery swapping may have a role to play in China, Gorbach said. But forget about it elsewhere.
“The business becomes a little more asset-heavy, and who is going to own the assets?” he asked. “If you find a pension fund that’s interested and can live with a 2% return, then fine. But it’s not going to be Daimler Truck.”
Nikola sells off plant land to raise money
When Nikola Corp. reports earnings on Aug. 4, it could report more cash than some expect. The financially struggling electric truck maker and hydrogen distribution developer could report gains from selling the land on which its plant sits in Coolidge, Arizona.
The Phoenix Business Journal reported this week that a real estate investor has acquired 394 acres of land in Coolidge from Nikola for $50.4 million or about $127,708 an acre. The report cites Pinal County documents and the real estate database Vizzda.
Part of that land includes Nikola’s manufacturing site. Nikola signed a 99-year lease on the plant. It paid $23 million to acquire the land in 2019. It earlier sold its headquarters in Phoenix and signed a leaseback agreement.
Nikola also should realize a $35 million gain from selling its 50% interest in a joint venture with European manufacturing partner Iveco.
Such moves, as well as the recent layoff of 270 workers, should help Nikola keep operating pending a regulation change in Delaware that will allow it to double the number of authorized shares. Some of those new shares are pledged to pay interest due May 31 on a $200 million loan from hedge fund Antara Capital.
Nikola would not comment on the report, saying the subject would be covered during the company’s second-quarter earnings report Aug. 4.
Another Nikola trucks-for-hydrogen deal struck
Separately, Nikola said Thursday it has an agreement to sell up to 50 hydrogen-powered fuel cell trucks to hydrogen producer BayoTech. In turn, Nikola will purchase up to 10 bulk hydrogen transport trailers and gaseous hydrogen from BayoTech’s hydrogen hubs in Missouri and California.
Nikola expects to begin production of the fuel cell electric vehicle (FCEV) Tre in the third quarter. Before the BayoTech deal, Nikola said it had orders for 140 of the FCEVs. Some of those include an earlier deal with PlugPower exchanging the zero-emission trucks for hydrogen offtake.
Shares of Nikola (NASDAQ: NKLA) closed 61% higher Thursday at $2.22 a share, their highest point since February. It raced ahead another 30% early Friday to $2.92. At their low in June, the shares traded at 52 cents and were threatened with delisting by the Nasdaq. That threat evaporated when shares closed above $1 for 10 consecutive days recently.
First ride in Rizon electric truck
The third generation of the Daimler Truck Mitsubishi Fuso-based eCanter is the quietest and smoothest yet.
That’s the impression from a brief ride along in a parking lot of a former electric power plant in Boston on Tuesday. The Rizon-branded Class 4 and Class 5 medium-duty trucks, announced in April, go into production in Yokohama, Japan, next month. They will begin arriving stateside in Q4.
“Fleets are finding themselves at an interesting position in terms of decarbonizing their fleet,” Phil Berko, Rizon sales and marketing manager, told me. “On one hand, they have obligations to buy zero-emissions trucks. On the other hand, they’re inundated with options from more manufacturers than compete for diesel business.”
Rizon is Daimler’s way of expanding its electric truck offerings. It has Class 8 covered with the battery-electric eCascadia and Class 6 with the eM2. Rizon allows Daimler to muscle in on the burgeoning number of legacy and startup players focusing on zero-tailpipe-emission equipment for pickup and delivery and regional haul.
With whisperlike operation, alternating current (AC) charging, an automotive-style dash layout, and shift-by-wire and electronic parking brake, the Rizon electric models should distinguish themselves in a market where some competitors are upfit to run on batteries. Rizon will run along a production line.
That’s it for this week. Thanks for reading. Click here to get Truck Tech via email on Fridays. And tune in to Truck Tech on FreightWavesTV on Wednesdays at 4 p.m. EDT and later on YouTube.
Next week’s scheduled guest is Roger Nielsen, retired CEO of Daimler Truck North America. Nielsen recently became chairman of battery and electric bus maker Proterra Inc., a company Daimler invested in when Nielsen was CEO. He is also advising and serving on the boards of multiple other mobility startups.