Nikola Motor will build a $1 billion hydrogen-electric semi truck factory in a suburb of Phoenix as the company pushes forward with its plan to deliver “the iPhone of trucking” to an industry that has historically centered on diesel vehicles.
The announcement illustrates a shift within the industry to move towards alternative-fuel trucks as well as semi-autonomous and eventually fully autonomous vehicles. Dozens of companies, from truckmakers like Daimler, Navistar, and Volkswagen to startups like Peloton, Nikola Motor, and Embark as well as Tesla, Uber’s Otto and Waymo, the erstwhile Google self-driving project, are pursuing what they believe is the next generation of trucking.
Tesla unveiled in November its Tesla Semi, an all-electric semi truck that is expected to go into production in 2019. Navistar International Corp and Volkswagen are working to launch electric medium-duty trucks by late 2019. Daimler began delivery to customers in New York City last year of its Fuso eCanter, an electric light-duty truck produced under the Mitsubishi Fuso brand that has a range of up to 80 miles.
Nikola has received more than 8,000 pre-orders for its semi trucks, which it says are lighter, cheaper to drive than a diesel—and all without generating tailpipe emissions. The company, which is currently based in Salt Lake City, said it expects construction to be underway by the end of 2019. The first trucks would be produced beginning in 2021. The factory is expected to support 2,000 jobs.
CEO Trevor Milton said the company spent a year evaluating nine states before ultimately picking the Buckeye, Ariz. location. The company will begin moving its R&D and headquarters from Salt Lake City to Arizona immediately with plans to complete the transition by October 2018, Milton said. The company or state didn’t provide details on an incentives package it received.
Nikola first unveiled the Nikola One, a hydrogen fuel-cell electric freight truck with a range up to 1,200 miles, in December 2016. The company is also developing a Nikola Two day-cab, which will begin testing in fall 2018. It’s expected to go into full production in 2021.
Since then, the company has locked up several partners including Ryder Systems, which will be Nikola’s exclusive provider for distribution and maintenance nationwide and in parts of Mexico. Bosch and PowerCell AB will supply fuel cells for the Nikola class 8 hydrogen-electric truck.
In December, truck components company Wabco took a 1% equity stake for $10 million in Nikola Motor.
“Everything people know about trucking is going to be changed because Nikola has changed it,” Milton told Fortune during an interview in November 2017. “We’re vertically integrated, we own every aspect of it from production to consumption of fuel. We’ve controlled everything, like Apple with its iPhone.”
