The Chartcast with TC & Georgia

Episode #35: Trevor Milton

July 17, 2020 Season 1 Episode 35
The Chartcast with TC & Georgia
Episode #35: Trevor Milton
Chapters
The Chartcast with TC & Georgia
Episode #35: Trevor Milton
Jul 17, 2020 Season 1 Episode 35

Join TC and Georgia as Trevor Milton, executive chairman of the high-flying company Nikola, sits down for a wide-ranging interview that lasted nearly two hours. With abundant energy and genuine enthusiasm, Milton fielded all questions head on. In an era characterized superficiality and empty sound bites, the conversation was refreshingly civil and comprehensive.

Show Notes Transcript

Join TC and Georgia as Trevor Milton, executive chairman of the high-flying company Nikola, sits down for a wide-ranging interview that lasted nearly two hours. With abundant energy and genuine enthusiasm, Milton fielded all questions head on. In an era characterized superficiality and empty sound bites, the conversation was refreshingly civil and comprehensive.

Speaker 1:

The fuel cells . I love story. Hydrogen oxygen, a spark of emotion, and then boom, it happens. You get water like in the ocean. And now from those oceans, after eons of human evolution , the people of earth need Mar clean energy could hydrogen and oxygen in a fuel cell, be one such solution. I certainly hope so.

Speaker 2:

Let's have some fun.

Speaker 1:

Hear ye hear ye Oh ye who hear this here podcast. No , this, this podcast is for entertainment purposes. Only nothing discussed on this podcast should be considered investment advice . The hosts hold no licenses and are not financial advisors do your own research before making investment decisions. And we do hope you enjoy this podcast and we are ready,

Speaker 2:

Trevor Milton, welcome to TCS chart cast so great that you could join us. Hey, thanks guys for having me. I appreciate it a lot. Yeah . So you're, you're a great sport for coming on our show. Uh , our audience, which is predominantly skeptical investors is really pumped that you agreed to come on. And so our , we very much appreciate it. Um, our show has a bit of a flow and the first thing we always hit is sort of a deep background in bio of our guests and , uh , no different for you. Why don't you tell our listeners who Trevor is, where you were born , um , sketch your life until you started. Nicola sounds good. Um , 38, 38 year old entrepreneur. Um, this is my fifth company I've built. I was , uh , ever since I was a child, I was very interested in business. Um, I came from originally, came from Utah. I was born in Layton, Utah, and moved from Layton , Utah down to Las Vegas, Nevada , um, and grew up most of my early childhood in Las Vegas. And when my mother got cancer, we, she decided she wanted to go up into the mountains to , or, or out in the, out in the farmland to live the last bit of her life. So we moved, I moved to a small town called Canab Utah. And from there moved kind of all over the world. Went to Brazil, went to, lived in Brazil, lived in Puerto Rico and came back to , um, came back to the States. And so I got, I was very fortunate to learn Portuguese fluently. And at one time I was quite fluent in Spanish, although I forgot I've forgotten most of it. So I've had a, quite an , uh , quite a fun life with a very, very supporting family, a father who was my biggest cheerleader in life. Um, he, he really pushed me to , um, to push the limits and to fail. And when I would fail, he would, he would reward before it , um , very different than most parents. And that I think had one of the biggest impacts in my life as a child to where I got today, understanding that failure was okay . Um, and it was a , it was just a huge impact in my life. Um, my father was, was , uh , a union Pacific railroad guy. He managed the railroad. That's where my love for locomotive semi-trucks came from. Um, I've talked about that extensively in my past about the NYCLA being a dream of mine since I was six years old , uh , driving locomotive, semi locomotives, and wanting to wanting to build a locomotive semi truck . So I am a , I'm a true entrepreneur. I only went to one, one semester of college. I didn't do very well. Um, and I knew it wasn't for me. I , I literally just went to , uh, at that time to go meet girls. That's the only thing that I went to college for. Cause I knew immediately there was no way I was going to do well in college, but I , uh, I was , uh, I was young. It was a lot of fun. I wanted to meet people and be social and learn how to be more social and learn those skills. And , um, it was a great time in my life. So five companies, three successes, two were failures in the financial terms, but were not failures in my longterm growth they're imperative. And , uh , that is a , that is a little bit about who Trevor is just a quick 30,000 foot overview.

Speaker 3:

Where did you get your entrepreneurial spirit? So many times it comes from a family member or a loved one that is a significant influence. Where did , where did that come from?

Speaker 2:

You know, this is kind of a funny thing because my , um, my dad was not that way. I mean, he had, he has a little bit of entrepreneur in him. He Def he started a few, you know , a few companies after he left the railroad, but he was a 20 plus year railroad guy. Right. He went to college, he had his , uh , he had his, he had his business degree. He is very, very , um, you know, kind of the non major risk entrepreneur kind of person. Right. He, but he, for some reason, he, I was born with a, with a, with a parent that really, you know, parents that really got me. Um, he was able to realize that I was a , that was definitely different when it came to how I learned. I could not learn from a book. It was impossible. I , he, I was , I'm able to learn from paragraphs. I can't read, I can't read books. So what I have to do is I have to jump from subject to subject to subject. I have to, you know, and then I can go back to the other subject and read another paragraph. But the only way I can learn is through , um, is, is like with massive amounts of, of quick data, I can do a lot. I can't do like, you know, books. And at a young age, he realized that he was like, okay , he, Trevor's not gonna to learn like, you know, like normal kids do. He wants to, he wants to touch things. He wants to break things. He wants to figure out how to put them back together and, and create things. And , uh , and lucky enough, for some reason, my dad , uh , my dad really pushed me to become an entrepreneur. And maybe it was a desire that he , he had, but it was never his talent. I don't know, we've talked a little bit about it in our life, but he just said he just loved watching me grow and he just didn't want to hinder me. So he just let me spread my wings in whatever direction I went. He , he helped me. And so I didn't really come from family, which is kind of strange. Uh , there , there , my family was more reserved. Um, but it's , uh , it's been quite an , uh , I'm definitely kind of the, the , you call the, you know, the inner energetic tornado , uh, of , in the family, you know, just everywhere I go. It's just energy, you know, it's a little bit different than my family.

Speaker 3:

Yeah . That's very cool. And, and what , uh, you know, what a nice thing to have had, you know, your father really be able to tap into you , uh , and the way that you learned . And it sounds like the way that you learn and digest information is probably perfectly tuned to the way that information is conveyed in this day and age. You know, you were born for the , um, the short digestible , uh, you know, quick info that is Twitter, social media, all of the way that we consume information now. So , um, kind of timing and personality may have collided quite well here.

Speaker 2:

He crazy. Huh? It literally, I was like , uh , you know, like ultimately like a tweet, a Twitter childhood or something before it existed.

Speaker 3:

Why don't you take some time and share with us, you know, in your own words , um, the , the Nicolas story, our listeners are certainly familiar with the company. Um, especially as it's been, you know, very much in the financial news as of late, but , uh, probably, you know, not many have heard really from you the evolution of the company. So why don't you tell us a bit about why you started it , uh, what you had in mind at the beginning, how that has evolved, what it's been like to have, you know, gone from starting a company and what merely two years later, your , your achieved unicorn status and now DECA unicorn is a publicly traded company. Walk us through some of the,

Speaker 2:

Yeah, this is probably where my relationship with my father goes back so far. He was , uh , he, you know, he had his head is a degree in, in , uh, um, he had his degree in business and hit his entire philosophy from the time I was a kid is , is how important it is to be financially sustainable. And as I grew him and I came up with these terminologies that you cannot be environmentally sustainable if you're not financially sustainable. And this is where I get a lot of, I get a lot of pushback from the, from the online community, because I'm a big believer of being financially sustainable without having to, you know, without having to rely on government credits to make your business model work. And so I don't mind government credits. And matter of fact, I think a lot of them are really, really good. Um, I, I would rather them give money to some of these things that I think are doing good rather than, rather than a bunch of the stuff that the politicians are giving it to, which are just a complete black hole. So I know they're going to waste money. I would rather it be towards things that I feel like we're actually doing people like some good, like, you know, like cleaning up the air and, you know, I, you know, just making, making the place where you live a little bit better. So I , I, I , I would rather go there. So, but I'm a, I'm a big believer. You cannot be environmentally sustainable if you're not financially sustainable. And so that , this goes directly to your question, why is that so important? Well, Nicola was built upon the basis that it had to be financially sustainable, that it needed to be a company that could thrive in this real world if the government credits evaporated and not only thrive, but it needed to be able to beat the diesel. And I'm also a big believer because I came from a very conservative family when it comes to finances and , and, and like regulation. I'm also a big believer in, in converting people through , um, through benefit , through understanding the benefits or the desire to change rather than forcing them to do anything. Um, my family never forced me to do anything. We , we are anti Ram, something down someone's throat type of people. So our , you know, my , my dad said the best way to convert people is to show them why it's better Trevor and it's , it's not to force them . And so I, I don't mind good benchmarks when the government says, Hey, look, we need to clean up the trucking sector. You've got to hit these benchmarks. The thing that I love to do is , is build a semi truck that can outperform a diesel and drive cheaper than a diesel. And it's still zero emission . And if I've done that, I've, I've, I feel like I've achieved. What is the, what was the most important foundation? My father taught me, and that is you can change the world. You can, you can be sustainable financially because you're , you're cheaper than a diesel to operate. And you're also sustainable environmentally because you're actually making a greater impact on society and in a, in a good way. And so this entire business model was built on, on this, in , uh , in this , uh, this essentially this integration integration of, of the semi truck with the fuel, with the service and the warranty. And if you look at the trucking industry, it's a total mess right now, if you, if , uh, you know, most of the trucks driven in America are owned by owner operators. Most people don't know that it's like 80% or 70, 70 plus percent. So these 70 plus percent of trucks driving on the road, the millions of trucks driving on the road, they have to find their own fuel contracts. And they're usually going through a co op they're getting taken advantage of by the oil companies in the, in the, in the stations, they pay 50 cents a gallon more than, than the big fleets. Do they pay more for service and warranty? And essentially what it does is it takes advantage of the little guy and it gives the, it gives the benefit to the big guy. And so coming into this, I said, you know what ? I've got to completely clean up this whole industry. It's a mess. I want hydrogen fuels extremely expensive to produce when we first started. And the only way to drive that cost down was to integrate it in with the truck to where, when you buy our truck, we provide the hydrogen service to you, all the fuel you need for the entire life of it. And you just pay us per mile. And by that, we've been able to reduce , we've been able to chop the cost of hydrogen from $16 a kilogram down we're , we're down below $3, a kilogram on our hydrogen now, which is $4 per kilogram, as parody with diesel. Um , $3. You have essentially 30, you know, you're almost, you know, you're 25, 30% less than, than a diesel to operate , um, which is game over for diesel. So by combining all that, finally, it's kind of like Amazon, where you, you buy something online and instantly it shipped through Amazon delivered through Amazon logistics, through Amazon, right to your door, through Amazon returns through Amazon. And that's kinda how NYCLA is when you buy our truck. Everything's covered. The complex backend is all covered and allows a driver to make a ton of money and compete with all the big fleets on that. And I , that's a kind of a very complex answer, but it , it helps you understand where all these, these like tentacles of decision thought processes went into when I built NYCLA .

Speaker 4:

Yes. So Trevor, we , we've done a lot of prep for the show. Um, we're very respectful of your time. And so what we thought we would do is divide the remainder of the show into sort of two segments first, a sort of a technology deep dive on Niccola . Um, lots of questions about the viability and , and , um, costs and, and the numbers you've quoted. And then the sort of back half we'll do a deeper dive on Nicola , the financial company and the stock, and, and some of the things that are happening in that space. And I'll lead the technology discussion and Georgia we'll , we'll do the finance deep dive with you. So yeah, it's gonna be fun. So , um, I got a lot of questions. I, I I'm , uh , I'm a scientist by training and I spent many years in the industry and by coincidence spent a couple of years looking at hydrogen. And , and last time I had a deep dive in the sort of hydrogen economy, especially for vehicle space was might've been five or six years ago. And at that time, storage was still a question, the efficiency of fuel cells , uh, and the cost of fuel cells were , was still a question. Um, it seems like you've you and the industry have made a lot of progress in those areas. Um , I'm very interested in some of the answers around hydrogen production costs in the numbers you've quoted, but before we do that, why don't you give us a summary of the Nicola technology strategy? How much is in house, how much is brought in, how did you build it? What do you have and what are you still need to be successful?

Speaker 2:

Yeah, there is this , um, there's a lot on this, a lot of technology on this truck, and it's impossible to do everything ourselves. Uh , we, what we try to do is really lead the, lead, the technology for the, for the world to follow and allow the suppliers to dedicate their thousands of engineers towards every one of these little tiny segments. Some of these segments are big, like the fuel cell , um , T to develop a fuel cell was somewhere between two and $10 billion to develop a fuel cell from beginning to end that fully functions and works. So we knew going into this that we'd never be able to fund it entirely ourselves. This that would just be crazy. And there's also no money necessarily in that, because it's a commodity now with so many people, you know , um, there's four or five groups there that are really good. You know, you've got Toyota, you got Hyundai, you've got GM with Honda, and you've got , um, you've got Dyneler and you've got Robert Bosch. And then you've got , um , some of the other ones which are, which have been around for a while , but are not, but are not so much on the , um, you know, on the, over the road. There's a lot of great ones out there as well. Some of our, some of the competitors that are run a fuel cell, but to develop a fuel cell to today's standards where you're , where you're pushing the, you know, you're trying to get into that, that mid sixties to mid 70 range on efficiency. That's a, that's enormous, it's in the billions and billions of dollars. So what we did is we , we originally, when we first started, we , we started as a natural gas turbine , um, hybrid because at the time, you know , this is back in 2015 at 14. Um, at the time there was no one, there was no, there was no technology out there for fuel cell yet that was advanced enough. Uh, at least that we could get our hands on , uh , Toyota was doing pretty well. But, you know, as, you know, as a tiny company, you can't just go meet with Toyota. So we ha we started out as a , as a natural gas turbine, a turbine group, and a , to , to reduce emissions and quickly as the fuel cells started to progress. And the suppliers started to make better MBAs , which is just the membrane. We realized that the efficiencies were going up, they're going up from mid forties to mid fifties. And I was like, okay, now we're over the 50% Mark on efficiency. This is doable. We , we ought to, you know , we ought to pivot to complete the remission. So we pivoted to the fuel cell and spend our time. We spent our entire time since then perfecting the fuel cell. We signed a deal with Robert Bosch, Robert Bosch put $130 million into Nicola , and they helped us get that fuel cell kicked off. Um, and it was ever meant to develop the fuel so entirely, but we do have, we still have our first two fuel cells. We built running in our trucks today. As a matter of fact, just yesterday, I was out on the track testing with the, with the fuel cell, a fuel cell trucks for the whole world to see live . It was a lot of fun. Uh , we did a bunch of, a bunch of video, a bunch of photos, and , um, those two fuel cells are still running, but they're not the official since he level of those are still not in the, you know, not in the sixties. That's, that's really where it needs to go. So we handed it over to , uh, essentially over to Robert Bosch. We said, look, you know, cause Bosch came in, they said, we have got an unlimited amount of great engineers with a near unlimited amount of funding. We want to commercialize this. We believe the diesel is going to be going away eventually. And we want to make sure we have a replacement for the diesel cause they make majority of all their money in diesel , uh , parts , um, injectors and so on. So it was, it was awesome. Bosch came in and essentially now they've got, they've got hundreds and hundreds. I don't know how many people it is. It's probably, you know, I know it'll push over a thousand people soon. I don't know where they're at on their employee, count on the fuel cell, but their billions into this thing. And they're going be a billions more when they finish. And whether we go with a, with a Bosch fuel cell or we go with a , uh , um, or we partner with another person is , is really up to us at Nicola . We're not forced to do anything, but , um, that is, that's kind of the heart and soul of the vehicle is the fuel cell. And , uh , that there's , we're now seeing fuel sales up in the, up in the mid fifties to low 60% , um, efficiency, you know , um , Toyota and GM are some of the best ones out there. They're, they're , you know, they're passing their 60% Mark, which is pretty incredible. And that's a , that's really what you need, you know, and , and the theoretical, the theoretical limits are, are much higher, but no one's been able to achieve anywhere near theoretical on the fuel cell yet.

Speaker 4:

Yeah. And I think one of the big , um , complaints of the, or the , uh, con criticisms from the battery side of the equation is that the Welter wheels, efficiency doesn't compare. What do you say to people when they , uh, when they put that in front of you?

Speaker 2:

It doesn't compare, but the problem that most people don't know, they've never spent their life in trucking. Th th the world and trucking actually doesn't revolve around efficiency. It's not what makes your , it's not what makes your , um, your company successful or bankrupt , uh , it's actually cost per mile. Now efficiency goes into that slightly. But if you think about it, when you produce a, when you produce a , a gallon of diesel , um, look at the amount of efficiency, losses that go into producing a gallon of diesel and delivering it to a truck, or look at even like , um , what a lot of people don't talk about. And I get, I get hit hard on this from the Evie community. Cause I've tried to speak truth rather than burying my head in the sand and just like, say, Oh yeah, batteries , fix everything. We Neco . It provides both battery and hydrogen electric trucks. So we're the only ones that are really tell the truth about everything. Cause we , we provide both the problem with batteries, ours , more than 50% of the energy , um , going into a battery electric vehicle is produced by , um, uh, produced by carbon , uh, you know, carbon methods or combustion. So it's either natural gas or diesel or , um, or coal or whatever. And the problem with that is, is you're only talking about 20% efficiency when you create the energy and then you got to send it through 20 or 30. Some double turbines can get up into the forties or maybe maybe higher, I guess there might be some, probably some, some , uh, um, more efficient turbines out there on the big power plant side of things. Um, but ultimately you're still, you know, if you think , if you take into consideration that you're down into the 20% range, even for your battery electric vehicle, cause you got a combustion engine producing , um , producing the energy, transmitting it through the grid and into your electric vehicle. So if you only talk about pulling it out of the wall, yeah, you're right. Electric vehicles are much more efficient. There have been the 96, 98% efficiency range. And , and, but that's not the truth you gotta look at well the wheel. And that's really where I try to educate people , um, that both of them are incredibly inefficient. It doesn't matter. It's the world doesn't operate on efficiency operates on cost per mile. And that's what I'll get into with you guys today about how, why hydrogen cost mile is actually sometimes cheaper than battery electric.

Speaker 4:

Yeah, let's do that. So I, I I've seen you on other shows and , um, and I did a bunch of reading obviously in prep for today and you know, I you've quoted some numbers around the cost of the production of hydrogen. Maybe I'll just fill in the audience a little bit and then you can expand on it, plan for Nicola. As I understand it, the business model is you're going to sell roots and , uh , you know, so you'll sell 25 trucks and the route will be from LA to Phoenix. And then once you have those trucks sold, you're going to build essentially distributed hydrogen production facilities. Um, an analogy would be sort of Tesla supercharger network. Your plan is to build out your hydrogen network as you sell routes , um , as a way to basically sell your trucks. Um, talk to us a little bit about that strategy, how you conceived it. And then I'm really interested to drill down a little bit on the assumptions that go into $3, a kilogram, a hydrogen production. Um , I know the hydrogen space pretty well. We can talk about how it's done industrially, but let's, let's talk first about your business model of selling the routes ahead of building your distributed hydrogen production facilities near the highway.

Speaker 2:

Yeah. You guys have done your homework. So I appreciate it . I love the good answers cause it actually gets fun. The more detailed answer, the more detailed questions people give, I just get excited. So , um, to answer this is the, the, the pre-sold routes is the key to everything with Niccola . You know, people, if you look at, if you look at energy solutions back in the day, they build all these natural gas stations, hoping people would build natural gas trucks and that they , they went bankrupt over it. And once again, come , you know, my dad and me, we sat down and we said, we cannot build a field of dreams. You know, you can't build it and hope people will come. You gotta, you gotta be able to provide both the chicken and the egg. So we knew that the only way to bring the cost of hydrogen down was one to own it. And two is to distribute it. And three is to take the revenue from the oil company and Ford is to presale the route. Now the cool thing about trucking is there's hundreds of thousands of trucks in America that that will enter service as a brand new truck and die as a completely broken truck after millions of miles. And they'll never have left the same set of roads in their entire life. They will follow the same route every day in his life. There's millions of trucks on the road, a portion of those follow the same route every day and will die on the same route every day. So this is what we target first. So we set up these stations, we set up, we sell these routes like we did with Anheuser Busch. We got an $800 million almost order. It's close to that. Um, for 800 million miles with Anheuser Busch on 800 trucks. So 800 trucks, a million miles is the contract and those trucks will live and die on the same route. Every day we go in there's 13 routes that they gave us and those 13 routes we're building hydrogen stations on, and you put either one or two on that route, depends on the range and the weight sensitivities. And then those trucks will fill up at that station every day. So you have a guaranteed consumption of your hydrogen with a guaranteed payback on your cap ex with a guaranteed profitability on each truck sold. And what's cool is the profitability on those trucks actually pays for the cap ex . So people are like, Oh, you got tens of billions or hundreds of billions in cap X. You're going to need, well, that's true. Over 20, 30 years, there's been trillions putting the oil cap ex you don't look at people throwing a fit about that. It's , it's all about profitability. So these routes, we, we pre-sell them. We make a ton of, we make a good amount of money and it allows us to pay for the network. And we, and we still make a lot of money. Cause we took the revenue away from the oil company. And , um , and that's the secret to the sauce is , is to sell pre routes. And then eventually over a period of say, five, six, seven years, you could open it up to people that drive transient, which is the rest of the market, or you never know where they're going to go. They're going to drive. But at that point, you've got routes on every major freeway in America.

Speaker 4:

So Trevor, I confess that I was skeptical of the Nicolas story and some of the technology, both because of my preexisting bias of listening to Elan talk about Tesla. Uh , but also because I last looked at hydrogen five or six, seven years ago, and then it seems to be a lot of , uh , huge barriers to surmount. Um, and I was, I came away after the prep for the show, much more optimistic about the chances. Um , but with one potential exception. And , and you mentioned it earlier. Now I want to drill down on it. Now you mentioned your hydrogen production costs. Um, you know, Goldman Sachs, just put out a report last week called carbon omics, the rise of clean hydrogen. Um, and they were still quoting 14, $15 a kilogram hydrogen, especially from renewable energy sources. How do you get down to three, walk us through that waterfall. Um, what are the assumptions that go in it and how robust are, are those assumptions? If you put them to a , to a stress test?

Speaker 2:

Yeah, this is, this is where we actually had all the pipe investors. You know, the biggest groups in the world, you know, P Sam and, and fidelity and BlackRock and all of them come in. And some of them, obviously you're going to get some investors that are just in it for the, for the spike or the value, right. Um, you know, whatever the increase, but we we've been drilled, absolutely drilled by some of the best analysts in the world, including Bosch and their entire team. And the, the question is, how do you, how do you get this cost down? It was your question. What you just gave was V when people walk in the door, they're like, forget everything. We don't give a shit about anything. Tell us how you get hydrogen cheap. So it's like, it is the, like this question I , the best part is I have got so much experience about this. And this is why I was like, you know, when, when Kathy or , um, when she, you know, arc investments really railed on us, you know, just slammed NYCLA for all this stuff. I told her, I said, look, you're going to want to prepare for this because I know this stuff better than just about anyone I've ever like, I've encountered, like, this is what I've spent seven years on is perfecting the ability to drive hydrogen costs down. And I, and I know my, I know my stuff. So today I'm going to be able to share with you a lot of the deep data and it's going to help you understand. So there's a couple things that have become , uh , that have changed in the hydrogen world. And it's not so much the technology side. This is what people don't get. Um, there is some Indian technology we've seen maybe a five or 10% increase in efficiency across the board. Okay. Well that doesn't change the world, right? I mean, it's a big number and it's billions of dollars in revenue. If you think about it in the grand scheme of things, but it's not what changes the world, right? And so you have to figure out what, you know, when I was a child, once again, my father, I'm going to refer to him a lot because he was the biggest influence in my life of figuring out all the complex problems he told me, he says, Trevor, you'll never have more money than someone else. The only way they'll ever respect you. And the only way you will ever solve those problems is to out checkmate them. You've got to learn how to out chess them, put them in checkmate. Cause that's the only thing that you've got that they do not have is your ability to think through data and problems. And that's what makes you equal because they will always beat you with more money. So I spent a lot of time trying to figure out, I was like, okay, money's not going to solve this thing. How do I actually solve this problem? How do I get hydrogen from $16 down to three? And so the number one is, as I started doing a study, when I got into this, I've spent a few years of this. I started studying every hydrogen station in America. Um, you guys may or may not know this. Do you know how many hydrogen stations in America are built on the same platform?

Speaker 4:

No, pretty , pretty much none. Not one. Right. That's what I was going to be my, if you forced me to answer, I'd say zero.

Speaker 2:

Yeah. And this is a , um, this is the, this is a huge problem because , uh, this is a huge problem because there is no standardization and everyone's missed this whole point. You never hear anyone talk about this. And so this was my, this was my, you know , this was my , uh, my move, right. This was like my, my main move of like, okay, how can I solve this? That no one is talking about how do I solve this big problem? Well, the answer is to standardize a hydrogen station into a station that could be duplicated tens of thousands of times and drive the cost down dramatically. So when you talk about the cost of hydrogen production, when you can standardize a hydrogen system, you're seeing a, you're seeing a, a cost reduction , um, of more than it really depends on the size of the station. But originally when we first started, the stations were going to be 50 to 60 million, and now we're down to, you know , 14, 14 million bucks. So it's, it's the standardization of a hydrogen station was the most important aspect. And it was a , you had to, you had to bring in components, you could buy a mass volume. You had to mass volume, everything you had to engineer at one time, and you cannot do it separate engineering for every station or you're screwed. And this is what everyone missed mean . Every hydrogen station America's built differently. They're not even the same. They're completely different compressors, different, different thermal, different methods, whether it's a, you know, whether it's , uh , um, uh, you know , uh, I , I mean alkaline or whatever you want to , what, you know, there's tons of different ways of producing this , uh, this, this hydrogen , everyone has a different methodology and the costs are outrageous and the service and the warranty on them are outrageous. So yeah, the cost was 16 bucks a kilogram and no one ever focused on that. And it was, it was all because of standardization. So we, we got together with , uh , with mill and , uh , we said, no , look, we really need to , uh, we really need to standardize this thing and cut out all the crap. You know, do we want to go with, do we want to go with alkaline? Do we want to go with , uh, with, with proton exchange? You know, what's the, what's the PM . What what's, what , which way do we want to go? You know, and nail nail, luckily nail had bought a proton exchange group. So they do PM . They also do alkaline. So they said, look, here's the advantage of both how clients cheaper to run in the long run is cheaper to run, but it's also less, you have less ability to load balance. Um, whereas proton, you can, you can just, you can dump energy and you can scale up really fast. It's like a fuel cell reversed, right? That's all it is. And so , um, you know, we had to figure out a way to get that, get that load balance on the hydrogen station to be stable. And that's what we did. We spent years and years doing this, and we figured out how to stabilize the load balance coming into the, coming into the hydrogen and with different technologies to be able to grid balance. So we have a blend of load balancing grid balance. And with that, our blended average costs, when you talk about it , um , and I'll go into the energy side of it here with you, cause I know that's your next question, the, the energy side of it, but the , the technology side of it is, is a blend between load balancing grid balance load balance means you want to have a specific load coming across 24 hours a day. And grid balance means you want to be able to siphon off excess energy off of the grid. When the grid is, is unbalanced with those, we've been able to build the most advance hydrogen fueling station in the world. We have one here in Phoenix at our headquarters operational , um, and , uh , we're getting ready to put in all the electrolyzers right now with the , with the city, we're waiting for the permitting on this stuff. Um, and so with that, with that blend of load balancing grid balance, that was the key is to stay a complete standardization of load and grid balancing electrolyzers. And that was the key. That was, that was the answer to getting it down. And we saw these prices start to plummet and we believe we'll be able to get that down below 10 million now , um, we're already at below 15 and we believe we'll be down below 10, probably within a few years into production. So true ,

Speaker 4:

Or just let me fill in a little bit for the audience, you know, the thought matrix of information for them. So now, now company is a M . Now hydrogen is a producer of electrolyzers based in Norway, very reputable firm. Um, one of the things that we discovered as we did on Nicholas , you do have really outstanding partners and blue chip investors. And we'll talk a little bit about that on the second half of the show, but now as your partner on the electrolyzer side of things, and electrolyzer basically takes a water or an alkaline solution, depending if you go alkaline or PEM , um, and you pour electricity into it, and then that's how you produce the hydrogen, which then has to be sort of collected and compressed and available for the trucks that would pull in to get refueled. Um, and then if you look at the cost of one of these distributed hydrogen production facilities, you sort of fixed and variable, we'll talk about variable in a second, but just a followup question on the fixed. So now this is your supplier of electrolyzers one of them you have. Yeah . But you're probably your development partner, you would say. Yeah , they're really good

Speaker 2:

With what we, part of it. They're good with the, with the, with what we call the, the load balance, we use different stuff for the grid balance.

Speaker 4:

So , um, and so the , is it going to be a mix of alkaline and PM ? Um, electrolyzers or is it predominantly alkaline with a bit of software to control it?

Speaker 2:

No, it is, it is a mix of, it's a mix of, out of alkaline MPM , but it's a, it's a heavy, it's a heavier on a much heavier on the alkaline side.

Speaker 4:

So then the last question on fixed before I finish up the technology stuff on the variable , um, is your, your demonstration facility of a , of a hydrogen production plant that I think you said is like near your headquarters , um, is that I read that that was one ton a day and that you would envision the facilities that you make across the country is eight tons a day and eight to one scaling factors , pretty reasonable, but still comes with some risk. Um , my understanding is that the proposed electrolyzers, that would go in those eight ton a day facilities are being made in a , in a factory at now that is not yet complete. What is the sort of execution risk on that side of the equation?

Speaker 2:

Yeah, so they , uh , nail does have a factory right now that, that, that actually does produce these electrolyzers. Um , they're just building a much bigger one for our, for our, for our order. We just barely ordered $30 million worth of electrolyzers last month. And that's like, I don't know the exact number, but that's like just a couple percent of what we actually need. So, I mean, it's , it's a huge, huge amount. So they're , they're scaling up a whole new factory to drive that cost down. They've been able to drive the cost down to those electrolyzers by, you know, by many times, and especially with the new factory. Cause a lot of it goes automated and a lot of it is just better equipment and how they actually can stage it and put it together and build it. And they just didn't have a, their existing facility is very hand-built and it's very expensive. And it's one reason why hydrogen was $16 a kilogram and they've, they've essentially been able to , um, build a new facility that's going online here shortly for our high volume stuff. And that's essentially our station in Phoenix, much more modified. So our station here has gone through multiple revisions. Like when we started, it was a , it was a pile of, you know, pile of problems. Let's put it that way. And , uh , you know, as we, as we got through this as worked through it, just hundreds and hundreds and hundreds of modifications to this thing, we're now getting ready to essentially revamp it to the, to a brand new version, which is what we're going to be putting in. So this is a one ton station here in Phoenix, and we're ramping up to an eight ton station and we're kicking off those eight ton stations already. We just ordered the electrolyzers forum and they will be running on the first , uh, Anheuser Busch routes. And those we'll have , uh , we'll have to , we'll have two different routes with eight ton stations on them running those trucks. And those will be the, you know, once we're done with those ones, it's essentially just game over, you know, you're , once we're going to have those up and re you know, we hope to have those stations up and running within about, you know, 18 months or so, somewhere around there. And it's mainly just because of permitting. We actually built the station in Phoenix in seven months and all the , all the, you know, all the people came out and the critics they're like, Oh, this will take you two years. You're full of crap. We built a station in seven months in Phoenix. Now it's going to take a lot longer than that to build the other ones. Cause you're , you're talking about actual production as well. So we didn't, we weren't able to put the electrolyzers on station at the same time here when we built it, there they're going because the permitting process is a lot, lot slower. So we anticipate two years from the time you kick off the station for the time it comes online, it's two years. So we're about 18 months away from having those stations come online for the first two routes, randomizer, Busch . And unfortunately those routes haven't been announced yet what they are. I can't tell you where they're going, but I can, you , you guys have a pretty good idea of what, what , um, obviously we're here. We want to be close to our headquarters. So it gives you a good idea. So last question

Speaker 4:

Topic for me, at least on the technology side, before I turn it over to Georgia, to drill down a bit on the financials is the variable side of the equation. Um, you know, I am reading that Goldman report, the levelized cost of electricity for green hydrogen, they anticipate between 20 cents while on the sensitivity analysis charts that they have. It's, you know, between 20 and 80 cents a kilowatt hour , um, you're quoting and your CTO is quoting numbers as low as 4 cents a kilowatt hour. How do you get to that number? Is it clean at that number or is it derived from fossils still? And you're just going to sort of bridge what's the, what's the variable side of the equation.

Speaker 2:

It kind of depends. We, our goal is to be completely clean on the energy, but we all know that's not possible day one. Um, it'll be much cleaner than the grid energy, but we have a , this is where hydrogen makes sense. And this is where most people don't know they are not experts in, in grid balancing or grid power. And so it's a little hard to all explain it to you guys, but just to let the listeners know , um, the reason why a lot of people online are very critical , um, is because they don't understand. It takes decades of understanding the grid to even be able to make comments about how grid balancing works. So I'll try to get into this to make it simple and easy and understand because they're like, well, if you can do it for hydrogen, why can't you do it for battery? And it's like, well, it's not, not possible. I shouldn't say it's not possible. It comes with some very difficult problems to do the same thing with battery. And so this is where we explain this, our hydrogen fuel cell trucks less efficient than battery. Yes, by a few times, it's not just a little bit, it's more, but hydrogen fuel energy, the energy to create the hydrogen fuel is many times cheaper than battery energy. And I'll explain why it's because you're not in the city doing the hydrogen production. This is the most important thing battery electric vehicles were designed for mainly even, you know, even our trucks, we've got the most advanced battery electric truck in the world. We have a truck coming into production right now with 720 kilowatt hours. The largest battery we know of anywhere in the , anywhere in the world, on a truck coming into production. We have five of them come off the assembly line right now in old Germany. So it's a , you know, they'll enter production, you know , in the next year, ish, somewhere around there. But why do I explain this is because I want people to know we're experts in battery electric and we're also experts in hydrogen. So we're going to give you the truth, even if it hurts and believe me, it hurts because people just despise and hate us for tea for telling them the truth about how this works. So inside of a city, this is where battery electrics make sense because it's weight-based , if you have the weight penalty on the freeway, you're going to go bankrupt. So you can't run a battery electric truck on the freeway, even if you have for homeless free energy. So let's say because the weight penalty is so huge, unless you only go 200 miles and then stop and recharge. Well, that doesn't do you any good? So I'm gonna , I'm going to , I'm giving you a couple, like, I call them the tentacles, you know, like where they attach and then I'm going to get in and drill into this for you. So the energy on the freeway, we , we, we tapped directly into the main federal transmission lines and we contract directly with groups, whether it's a , you know, an example would be like, you know , um, would be like a Tennessee Valley authority or something, you know, or, or one of those where you're where you have a huge hydro plant, you got tons of energy and you can pull it out on the freeway on the federal transmission line where you're not going into the UTA . You're not going into the utility. Uh, you're, you're contracting directly with them. You, you wheel it, you pay a small fee, like, you know, fractions of a penny per kilowatt hour to wheel it and to pay that, pay those fees. And then you pull it out. Uh, w you know, people have different terminology for it, but we call it, you know, behind the, behind the meter, which means we're not, we're not dealing with, when we say behind the meter, that's our terminology for saying, we're not dealing with the utility. We're dealing directly with the generation group. So we pull in it for hydrogen, all of our hydrogens produce on the freeways. We don't do it inside the city. And this is a really important point to make, because this is where we have the advantage. This is where hydrogen is advantageous. So out on the freeways where the federal transmission lines are, and we can tap in, and we've, we've already preplanned all these, these locations where they can go. Um , and we're gobbling up the best locations right now. And so this makes it almost impossible for competition to come in and compete with us. We can pull energy out anywhere from 2 cents to , to , uh , 4 cents, a kilowatt hour, all day long with these guys. And if you're really expert in grid, balancing no not load balancing, but grid balancing, then you'll actually get energy given to you, or you'll get energy at a very low discount because you're solving the utilities problems. These utilities have mandates to have a certain amount of their grid balanced, and rather than them going and spending all the money, they'll actually give you a discount on energy. If you'll take the energy from them to balance their grid, this is where hydrogen makes a lot of sense, because you can run hydrogen 24 hours a day. You can take whatever the grid wants to give you for the most part, you have to size it appropriately, but ultimately it allows you to buffer this huge problem of what's coming on with solar and wind and renewables. And with that, you have a majority of clean energy. Usually it ranges in the, in the range of 70 to 90% of clean energy on , on what we're looking at our business model. Now I can change. Do you know that changes all the time based upon the network, but the idea is that you're a majority all clean you're , you're very inexpensive. And as soon as you go into the city, let's just take a couple of examples. You know, we're doing a lot of stuff with like , um, with Anaheim and , uh , you know, essentially California coming in, in and out of California, San Diego, like these, these different routes coming from, coming from California over to LA to Phoenix, right? Is there's a lot of these routes that we're, that we're dealing with. So, I mean , we'll just take one of my God . I don't know. I probably have 15, yeah . 20 of them in here, right here, but just in San Diego alone, you're 18 and a half cents per kilowatt hour. As soon as you go into the utilities network, they will not under any circumstance, give you a deal on that, unless you provide a substantial , um, reward for them or reason to give it to cause they control it, their utility, they, they they're like the government. They don't care what you think or what you say. And the average cost of Tesla supercharging right now is in the mid, mid to upper twenties. So 28 cents a kilowatt hour, 26 cents a kilowatt hour. Well, why is that is because your energy base rate is 18 and a half 16 and a half or 12 and a half say if you're in Riverside, I'm sorry. Actually, I got that one. It was 11 and a half in Riverside. I can't remember every number in my head. I got too many billions of numbers, but if you're in Riverside, you're talking about 11 and a half cents a kilowatt. Well, the problem, what people don't know is about what they call a, what they call a , a demand charge. And I'm sure you guys are very familiar with what a demand charge is. A demand charge can be up to $50 a megawatt hour. So you're talking about 50 cents a kilowatt hour on top of whatever you pay. So when people, when people say, Oh yeah, well that you're , the electric trucks can just charge in one hour. Okay. You know, you're going to pay you . You've got, say 10 trucks. They're all a megawatt hour. Like according to Tesla's , you know, truck size , um, ours is 720 kilowatt hours. So we don't go as big as, as they don't have their truck out yet, but we don't. We, the weight penalty was just too big. It didn't make sense. You know, if you want to go, you want to pull, let's just for easy numbers. Let's say you have 10 trucks and most companies are ordering hundreds, right? So let's just say you have 10 trucks. You got , you got to , you want to charge a thing in one hour. Well, you got 10 megawatt. You know, actually you'd have to do it at, at, at a Tusi race. You need 20 megawatt hours during a 30 minute period in order to, in order to charge those batteries in one hour, because you can't charge a battery with full load the entire time. So you're talking about a demand charge of nearly, you know , 50 cents per you know , could be, it changes everywhere, but you're talking about 50 cents per kilowatt hour up to some of them are down to 30, but then you add that to the, to the 15 to 20 cents per kilowatt hour for the energy you're talking about 70 cents a kilowatt hour, just to dump the energy into those vehicles as what no one gets. I mean, you're talking massive, massive costs. And I know these numbers because we're contracting with every one of these power companies. I mean, not, not everyone , but a lot of them. So we've been talking when we have, we have exact costs for our customers and what it's going to take. So on the freeway, you can do this with a hydrogen easy cause you can buffer it and it doesn't require, you know, all your technology is already there to buffer. Now you're going into the city for battery electric. All of a sudden you're talking about , um, you know, if you , if you have a thousand kilowatt hours at 70 cents, a kilowatt hour, worst case, I'm going to disclaimer worst case there . You know, you're talking about $700 to top off that truck, best case. You're probably talking about 30 to 40, you know , 30 cents a kilowatt hour with , uh , with the , with the demand charges, best case. So I think, I mean, I could be wrong in a couple areas is only in California talking about right now. Um, so you're talking about three to $400 , uh, a tank to drive, you know, you're , you're , you're , uh, you're 500 miles according to the competitor's numbers. So if you look at all those, that's actually higher than our hydrogen cost per mile. So it all comes down to cost per mile. It's not about efficiency. It's about cost per mile and you don't have those demand charges on the freeway. You don't have the high energy rates on the freeway. You're , you're directly buying it from the power source. So they say, well, why can't you do that with battery electric? Well, go in and talk with PGNE and tell them you want to bypass their , you know, Hey, we just want to bring all this energy and they're going to say , um , no, and if you do , uh , we're going to charge you massive, massive willing fees and grid fees. And by the time you're done, you're going to pay 30 cents a kilowatt hour anyways, or 20 or whatever it is. So that is the, I hope that helps you understand that that is why , um , you, this, why it's, why we're able to get the cost down on hydrogen. You can't do that with , uh, with, with battery electric and in , in some areas,

Speaker 4:

Let me play it back to you and by extension, maybe for the audience to make sure that I fully understand it. You're and it actually makes a lot of sense when I hear you explain it. So your position is because you are a son , you know, a lot of people don't know about the grid. I happen to know a fair bit about the grid. I did a lot of work done in windmill technology back in the day , um, electricity is fleeting. You , you have to make it to meet demand. And , um, the people that produce electricity have to have a certain buffer because they don't always, they have good models, but they don't always know the , the spikes of electricity. And so, you know, last thing you want to do is , is short consumers. Um , but it's not like you can generally speaking. It's not like the grid has the capacity to store energy. Um, what you're basically proposing is that one of the reasons why Nicholas hydrogen costs using this distributed hydrogen production facility concept is so low is because you're providing us a sincere service to the grid operators to essentially be giant batteries for them. When they have excess capacity, they can sell it to you or even give it to you if they have to. And then you can use that to make hydrogen distributed. Um , and then when they have a big surge in energy, they can cut you off and you don't care because you have enough hydrogen , uh, in your distributed sites to fuel your trucks. And so some of the value that Nicola is capturing through the distributed network is the service you're providing to level out the grid structure. Do I have that right?

Speaker 2:

That is part of it. Yeah . So if you have none of it, let's just take worst case scenario. Cause it's what people, you know, on , on there always say worst case scenario,

Speaker 4:

We're smart people talking to each other.

Speaker 2:

Yeah. So they say, Oh, well, you know, that might go away. Someone else might take that contract from you or whatever. Okay. So let's just say you have none of it. You're still $3, a kilogram of hydrogen. If you have, if you have, if you do get this, which every contract we've been doing right now has been to where we get very good discounts, if not free for a lot of energy, you're talking about, you know, $2, a kilogram buck, 50 buck, 80. And that's, if you get the that's, if you're solving a problem for the grid, if you're not solving a problem with the grade , you're still, you know, right now everywhere we've been looking at on the, on our trend because we only place them where we can do this. And with hydrogen, you get a lot more range. So it gives you a way better advantage over anything else. You, we only look at areas where we can get this energy for sub sub three or 4 cents a kilowatt hour, guaranteed 24 hours a day. And we've been able to do that. And almost every one of our major locations that we're going up and we're gobbling up those locations. Cause once Nicola takes them, they're almost impossible to get. And so we're just, we're just gobbling them up. We'll have 700 of them here in the U S and over the next seven years. And we're , we're doing about we're , you know, we're trying to work on about a hunt , you know, slower initially, but we'll end up being about a hundred stations a year going up, and there's not like there's not an unlimited amount of locations. They're there are thousands of them, but there's not an unlimited amount of locations to do this. And so it's, it's, it's a key, it's almost like a, you know, a good grocery or a good gas station on the corner, right? The gas station down the road still makes money, but the one on the corner makes all the money. Yeah . So ne Niccolo's the one on the corner. We get the prime location, we get the prime rate, we get a prime contract, 20 years lock them up. We solve their problem and we get much lower hydrogen costs , but assuming you don't get any of that, you're still below that $3 per kilogram rate. Wow .

Speaker 4:

Listen, Trevor, a fair , much appreciated the technical part of the conversation. You've done a great job representing, I think , um , pretty compelling counterarguments to criticisms of the NYCLA strategy. Um, not enough time for us to get into the other things I wanted to discuss, which some of the advantages of hydrogen, like very high, you know, energy per weight and even energy per volume compared to Evie and , and how that is critical for, you know , long haul trucks .

Speaker 2:

I'm actually, I would love to get into that if I don't even mind,

Speaker 4:

Oh , you don't have a heartbreak. You know, we're happy to keep talking to you. What , talk to us about the advantage of , of hydrogen, which in my mind, I think is very legitimate, which is compared to batteries. Um, hydrogen is very much more energy dense, both on a, on a weight and even on a volume basis compared to, you know , um, the battery technology for long haul trucking. And the part that I don't think people really understand that it gives , um, hydrogen for long haul. Trucking has substantial advantages that , um , reduction in weight, frees up cargo space. And so it's not a cost issue. It's a, it's actually a revenue generator because you have the excess capacity. Talk to us a little bit about the flip side, which is the positives of hydrogen for a long haul .

Speaker 2:

Okay. Yeah. Real quick. I will, I'm going to get into that, but I want to answer, I want to, if you're okay with it , I'd like to just touch on one more point for the pre or show discussion, because this is where I know that people are gonna have questions. They're going to say, Hey, look, you know, look, it's so important for people to know. We have not , we are not against battery. We love, there's a lot of good advantages towards battery electric trucks, but they say, well, you know, Tesla, you know, they say your competition has , has guaranteed 7 cents per kilowatt hour rate in the city we've met with. We, you know, we met with probably 12 different power companies all throughout the West. And none of them have told us that, that is that , that they've agreed to any of that, nor do they see how they would do it. So they say, okay, well, why can't you just put batteries in there to buffer the grid? So this is a good question. So for the audience that says , you know, why can't you just put batteries in there to buffer these battery electric trucks? And then that way you can do that same advantage that hydrogen has with shaven off the peak of the, of the grid. Very good question. So here's, here's what it comes down to on a, on a big semi-truck , um, like our competition has, and that we have, you have a hunt. If Tesla pays about a dollar 75, a cell as what they found is going into direct cost. Okay. Their true cost per truck is $120,000 per truck and batteries. Um, so if you think about what that cost is $125,000 for their battery electric truck, they in order for them to be able to fast, you know, to charge that truck, you would have to put another bank of batteries up equally in size for, in order to load shape , um , that energy. So you have $120,000 on the truck, plus $120,000 in grid storage per vehicle. Those batteries right now are on the truck are the best batteries out there. I've got two to 3000 life cycles , um , you know, full, full charge and discharge cycles. So you've lost 30% of your range. And this is based upon the data coming from the they're their own vehicles. So I'm just using their own numbers, not, not anyone else's. And if you think about that, if you have to charge a truck twice a day, you know, to get your range, you know, no one's going to let an asset just sit there. They're going to want to use it at least once or twice a day. You're only talking three years until that truck has lost 30% of its range. That means it went from a 500 mile truck to a 350 mile truck. And it can't fulfill its , uh , its its duty obligations anymore. It also means that per truck you sell, you have to have another $120,000 just in batteries that does not include the rest of the cost of connecting it to the grid and all the other expenses that go along with it inside the city, you're really talking about for every truck you sell. If you want a grid balance with batteries, you're talking about about $200,000 per truck. If you think about those numbers, your business , you know , 200,000 plus the hundred and you know, it costs 120 for the battery, another 75 for the chassis and powertrain and everything else. So that the cost of the trucks can be about 200, you know, slightly under $200,000, about 185,000 for a battery electric truck. If you're really aggressive on pricing, now you're talking about $385,000 per truck that you got to set aside. So, you know , if you think about the numbers, that's not financially sustainable because now what you're doing is you're masking losses on CapEx . You're saying, okay, we're going to go lose $200,000 on cap X , just so we can sell a truck at a loss. This is what our competitors are doing. It's absolutely mind boggling. So it's, it's, we're trying to educate people that look you can't, you can't grow . The only way to get around that is to not grid grid balance of batteries. Okay? Now you can actually sell a truck at possibly break even or a loss or, or a small profit, but you don't have the, you know, but you can't grid balance with that. And that's the problem. That's why, that's why you cannot grid bounce the batteries because you have to have an equal amount of energy does to top that battery off. And if you , you fast charge it, you're going to degrade those batteries. And now you've got to replace your nut , your truck battery every three years. And, and uh, and your grid battery probably every five or six years. Um, so cause the grid batteries have different cell chemistry. They're going to last longer. They're gonna , you know, they're going to be two to three times longer than a truck battery on, on , uh , on lifecycle . So it's very, it's so complex, but I'm trying to like make it simple for people to understand. We don't hate batteries. We love them. We sell them. We're going to have billions of dollars in battery, truck sales, but people have to understand that the cost of operating a battery electric truck is going to be equal to or greater than the cost of operating their hydrogen truck. And that's a hard thing to get their mind wrapped around, especially when we've been called a fool cell for so many years.

Speaker 4:

Yeah. Well, you know, lots of, lots of , um, uneducated people online, including some very famous ones, make stupid statements that I find objectionable as a scientist, I would say

Speaker 2:

No one size fits all. So sorry, I didn't mean to cut you off. I just said one size does not fit all anywhere in this world. And people need

Speaker 4:

That filling and emptying a hydrogen tank is far less of a degradation concern than charging and discharging a battery. It's just common sense to me. Like I , I I've dealt pressurized gases

Speaker 2:

My whole life. It's just a tank. You can take your propane tank to home Depot and fill it and discharge it on your barbecue countless times before it goes, bad batteries are different. They go bad. Everybody knows when you have a battery, you don't want to leave it on your shelf for too long because it degrades over time. And if you have a rechargeable battery, sometimes your phone takes longer to charge and is not as efficient over time. It makes a lot of sense to me. And especially when you consider the volume metric and the , um, the weight density advantages, which allows you to generate excess revenue from having more cargo space. So for the particular narrow problem of long haul trucking using hydrogen, I think it makes a lot of sense. So you have , you've answered all my questions, very admirably. I very much appreciate it. Um, and, and before we close, you know, we certainly want to leave lots of time to talk about the financials and the stock. And so if you don't mind, I'm going to turn it over to Georgia and she's going to drill down a little bit on , on Nicola , the company. Yeah, it , I , uh , one quick thing on that, I was just gonna , uh , you asked about a little bit about the hydrogen. I mean, that's such a key important part is, is how much lighter it is. It's, you know, it's about 10,000 pounds. Well , up to it's depends on the truck size, but five to 10,000 pounds, less than a, than a battery electric vehicle in weight. And that's an important factor because in, in, in, in trucking, everything's based upon weight, that's most of it, you get all the , the most of the freeway long haul stuff is all based upon weight. Most people are running full loads and every pound is worth serious money on revenue. And so if your truck is weighing five or 10,000 pounds heavier, you've essentially gone bankrupt and in tires and where , and all the other things that are beaten up the roads and everything else that comes with it. Yeah. So, sorry, I didn't mean to just like jump off where it was an important part that people need to understand why, why one size doesn't fit all and white, you know , white battery works really good in the city, but hydrogen works really good on the freeway. And that's, that's the really, the key point we're trying to make is they're just so different. They don't even compete with each other really you've convinced me

Speaker 3:

Now . Good. Thanks for all that. I mean, it is a , it is complex and so helpful to hear you kind of break it down and have our listeners get a better kind of better understanding of what's really driving the technology. Certainly though, there will be a lot of questions on the financing side. Um , particularly as Nicola came to market through a spec , we'll get into that in just a second, but , um, perhaps we could start the discussion on the, on the funding and the financial side , uh, really pre uh , public offering and talk about how you initially started funding the company. Um, for the sake of our listeners, I'll just share a brief background. Um, you know, you started the company in 2015 and through 2019, went through a series of fundraising rounds, a series a through D um, talk to us a little bit about some of those fundraising rounds where they , um, even while, you know, VC backed companies are typically private offerings. So I won't say was it a public offering, but as I understand it, a number of these fundraising rounds directly related to strategic partners , um , as investors, were they open to other investors as well? Talk to us a little bit about your pre [inaudible] fundraising and then we can get into the most recent round.

Speaker 2:

Yeah, so we started , um, we, you know , pretty much when I first founded the company, I funded the first few million dollars to myself, brought in an investor called Worthington industries that bought my previous company. They funded it with a few million dollars. Um, so we just had a , we had a pretty small budget, you know, it was four or 5 million when we first started, we were working out of my basement at my house. It was kind of funny literally for a whole year. Good thing. I wasn't married at the time. Um, and , uh , we had computers all the way up into the kitchen and , uh , I was quite , uh , quite a fun time in life. And , uh, and , and it was very difficult cause we were trying to do something on a shoestring budget. And , uh, and then we brought in a few other investors as group called , uh , uh , Thompson , Caterpillar came in. They, they invested , uh , um, uh, you know , you know, millions of dollars, not, not , not, not huge. It was under 10, but it was, you know, it was , it was a nice, nice little chunk and it really helped us. And shortly thereafter , um, Robert Bosch came in with their first $30 million investment into NYCLA. Um, and so that was a big, that was like a big, a big jump for us. It was that 30 million was like, was imperative for us to being successful here. Um, and once, once , uh , uh, Robert Bosch came in and there was multiple other groups that came in a bunch of a bunch of different investors, they're smaller ones. Um, but we also had other groups like industry. We really focused on partnerships rather than just money. We , we really wanted people to help us because I, I didn't have enough money to do everything in house. And I was like, I need help to do things. So with Robert Bosch, they could throw thousands of engineers at Sutton and it would save me, you know, $10 million. And so I was like, I don't really want to do this all on my own. So we, we worked with, with [inaudible] invested, I think they put about 10, I think they're finally show they put it originally around 10 million in or something. And you know, the web is one of the best , um, you know, suspension , um , braking, stability control companies in the world for heavy duty trucking. So we brought [inaudible] in and , um, well Abigail came in and helped us with hundreds and hundreds of engineers and solving these complex problems that did not exist or did not have a fixed or a solution to these semi-trucks yet for electrification. So they helped us solve them. So then I started realizing how important partnerships were. And I was like, man, I don't know, money out there with financial people is a nightmare, but I can just, it just comes in gravy train with these partners. I should just focus on partners. And that's what I did. So I kept focusing. We brought in Bosch , came in with another hundred million hun wall , came in with a , with a hundred million. Why [inaudible] well, there's a perfect, we talked about hydrogen. Han was, is the largest solar provider. I think the largest solar provider in the world, if not, if not the number one, number two. So they're doing the largest solar fields there . They sell more panels than anybody, and they have the highest quality panels in the world. And so I was like, you know what? This is a perfect partner. And they came in and said, Hey, you know what? We can provide you this energy at very cheap rates, solar power purchase agreements are going for mid twos. So we can pull a ton of energy off, you know, five, six hours of the day for 2 cents a kilowatt hour. And so we're like, that's perfect. So once again, great partnership. They came in, they spent a hundred, they invest a hundred million dollars. So that whole, you know, we had, we had rain , we had raised hundreds of millions at that point. Um, and then we decided to , uh, we, we knew that watching , uh , the mistakes of our competitors, I did not want to repeat them. Now. I have a lot of sympathy for what a lot of these guys have gone through. Cause I could not have done better. So everyone listening, I could not have done better, maybe better in certain areas, but I would not have been able to do better than they did what they went through was hell and they're still going through hell and they're gonna go through hell for the next 10 years. And I did not want to do that. I was like, why in the world, are they not working with another OEM? You know, if people ask me if I gave advice to them , the two things I would do, I would, you know, I, I definitely would have , I definitely would've used another OEM to help us build our vehicles if I were them. So I had to take that same advice and I needed a raise. I needed to raise money. And I also needed someone who knew how to build vehicles and build trucks really well. So I raised a quarter billion dollars. It was a, he was a hundred million through cash and 150 through sir through through services that we needed rendered. And Evaco came in, we met with every truck company in the world and most of them were so arrogant that I could never work with them. They were just complete a-holes and you know, we'd walk in the room and they'd say , why should we work with you? And I would just walk right out the door. I'm like, if you can't see why your old dinosaur ass needs to work with me, I have no desire to even be in this room. And I walked out of a few of them. Um , I just had a lot of these guys have no respect for the younger generation at all. They just think that, you know, that you're just a , a fly that is buzzing around their head and you're annoying and you're, you're worthless. And , uh , and so, and some of them we've passed them in valuation. So it's funny, who's the, you know, it's quite funny to see that, but we needed someone who could build trucks. And so we partnered with the VECO, you know, 50 plus years of manufacturing experience, they built tens of thousands of trucks. They know what they're doing. They have the supply chain done. And so we went with them and we said, look, we will help you with technology. Cause they, they, you know, they just didn't have it. They had, they were not good in technology. When it comes to, when it came to electrification, we'll help you there we'll build a joint venture, but we want you to help us build trucks. Not only here, not only for Europe, but we want you to advise us and help us set up everything in the U S as well, to make sure we do this right. So they did, they came in, they said, we will do that for you. We'll help you. We'll help you learn everything we learned in 50 years. We'll help you with our, with our teams, with our engineers, with our production managers, with our site planning, P pap supply chain, third party logistics. We'll do it all for you. We're experts, you know, and that's what we did. We , we did an agreement and so we have a joint venture in Europe. We have the first , uh , zero emission electric trucks coming off the assembly line right now we have five of them and we're, we're going to be entering production next year, fleet testing with customers next year and the end of next year for our , um, so it's, it's really exciting stuff that, that, that is where a quarter billion dollars came from is we decided to use someone who was expert at building trucks to , to, to prevent us from screwing it all up. Then we raised , uh, over 700 million in this , uh , in this, in this reverse merger. And I'm sure you guys have questions on that. So that's a little bit of a , of a background on all the money.

Speaker 3:

No, that's great. Thank you. And, you know, hearing you talk about sitting down with the old guard and having them say, why should we, you know , why should we be talking to you? It reminds me a lot of the story behind the Dyson vacuum cleaner. I don't know if you've ever met or heard interviews with James Dyson, but he talks about, you know, sitting down with Hoover and the old guard of the, of the vacuum industry. And they were kind of like, why should we look at your, your little gizmo you have there? And he just knew, no, you're missing it. If you can't see it, it's cause you're too comfortable. You're missing it. And I'm going to keep going. And he's completely revolutionized airflow, I suppose

Speaker 2:

It is . It's unbelievable. I cannot like if I wish, I , I just wish you could have someone could have like, been filming everything from day one to where we got to with Niccola. It would be, it would be the study of probably every college in the world for the next 50 years, because it is the amount of absolute that we've gone through in our life to get here. And the people that have just, just targeted you. I mean, they absolutely target you. They call your banks and tell your banks to , to , to not work with you. Not, not, I mean, they literally do everything they can to stop you. I mean, it's not just like a , Oh, we don't like you. It's no we're going to destroy you. We're going to hire private investigators. We're going to try to find anything in your life we're going to hurt. You know, it is, they are just brutal when it comes to like, they just want to see you destroyed and they just, they look at you like a problem. And so you walk in these rooms with some of these OEMs and literally their first and the first question sometimes has been, why, why should we, why should we work with you? What , what makes you special? And, and I just, I almost want to throw up, I just, at that point, I'm just like, I it's, it's unbelievable. And that story Dyson, I did not know that. And you know, and it's an incredible thing to hear because it matches almost identical to what I've experienced in the, in the trucking world.

Speaker 3:

Well , uh , as a bit of a proxy, I can relate very closely. I've spent my career building a pretty terrific career as a woman in finance, and that's also kind of a tough position to walk into a room sometimes. You're , um, I'm usually the only , um, no, thank you for sharing that. And we'll talk a little bit more kind of after we go through the structure of the transaction about, you know, the kind of the counterculture as sort of piece of, of what you're doing and when you kind of insight, insight the cults ,

Speaker 2:

By the way, I want to tell you it congrats on where you've got , um , one of the most brilliant , um, one of the most brilliant women that we've we've ever encountered. And I, and I only, I only know him just because of our , our , um, I have a good friend of mine who goes a long , long time back into a general motors. One of the most brilliant women is general motors , CFO, and she is just an absolute rock star . And there are so many, we have no, we have nothing with him . Um, they're a competitor of ours, but I can, I can tell you that. Um, one of the benefits I had in my life was it was my, my mother and my father, my mother died of cancer. When I was young, I was 14, but I never saw a person treat a woman with more respect than my father. It was like an in the household that we grew up in, if you were to ever like the , the, the way we were raised with our background or religion and in our family, there is, there's nothing more harmful in this life. You could do that, insult your mother or a , or a woman. And it was , uh , and it's just been so incredible to see that the society change to where you have so many great, brilliant women, you know, we have, we've been trying, you know, we've been trying so hard to find really awesome women to help fill them .

Speaker 3:

I don't see too many listed on your , uh, your top rank Sydney .

Speaker 2:

We actually have a lot. We have , uh , we we've been working . We have, we have quite a few, which is you would, you know, we've been month over month. We've been, we've been very active in and increasing those , uh, the numbers and percentages because we want to , you know, and only the right ones. Right. And it's been awesome. We have a huge group of , of brilliant women here at Nico . And they're hard to find they they're are hard to find cause everyone, everyone wants brilliant. Um, you know, really great, talented, motivated women to work for him . But I just want to tell you congrats because it just is so cool. Like, I, I, I love it. It makes my heart happy. I just , uh , I it's so, so amazing to see , uh , amazing to see how, how much our society has changed and how, and how much , how much change the women have actually done in this world. So anyways, I just want to tell you congrats for getting to where you are and all the hell you went through walking into those meetings.

Speaker 3:

No, not at all. It's a pretty happy place to be where I am now. I get to do what I love and interview people like you. Uh , so with that, you know, let's , uh, let's keep talking about some of the fundraising you've done. Um, you know, as you've shared , uh, you really have a , what sounds like a very committed, fairly concentrated group of investors, mostly with strategic partners , uh, up to this point. And then earlier this year , uh, you , uh, engaged with vector IQ , um, on a business combination transaction. Uh, let me just take a quick moment to share some of the terminology for folks that are listening. And then we can talk about the , the thinking it that you and your team went through. So , um, Nicola went public via spec , which is a special purpose acquisition company and specs are essentially, they're also called a blank check company. It's essentially pooled cash that is then publicly , uh , the company itself, the shares become publicly traded, and it's there for the purpose of finding a company that it can acquire and roll up onto that , uh , listing. And in this case, the , the ticker changes of course, from what it was originally , um , here with vector IQ, which is a VT IQ and then becomes relisted as , and KLA. But a spec is often seen , um, pro cyclically. So kind of at the height of bull markets , um, from a practical perspective, one of the reasons for this, and this might be part of the thinking that, that you went through Trevor, is that , um, you know, at the height of bull markets, there's typically a lot of volatility and volatility is not a friend of IPOs. Um, certainly not from the perspective of the company. And so a spec remove some of that volatility, but there's a price to that, of course. And more skeptical point of view on specs is that they undergo less scrutiny than a traditional IPO. Uh, the registration process is very different. The target company is dealing with kind of a single entity , um, via the spec , as opposed to the broader potential sponsors of the listing. Um, and so you have, you know, a lot of considerations, talk to us about what your thought process was going into being a publicly traded company. I imagine you discussed and evaluated all the options available to you and, and tell us how you arrived at the decision that you did.

Speaker 2:

Yeah. Great, great, great analysis, by the way, if you're ever looking for a board position, let me know. Um , no, it's, it's, it's I love how you set that up for people because there , it really does, it's it, it goes hand in hand with where the market is. Um, SPACs have been successful, but they've also been huge failures that right now, Nico is definitely one of the top two or top one or two or three most talked about analyzed specs on the entire , uh, exchanges. And it's, we've gotten a lot of good publicity, but a lot of criticism as well, and rightfully so about questions and that's okay. Like I like, I like people to analyze it cause the more they analyze it, the more they fall in love with NYCLA . And it just takes time to really digest it. It's a , it's a very complex business model, but it's also a very brilliant one. And the SPAC was , uh , what we, what we wanted was there was a couple of things. We wanted blue chip investors. We were not going to go public because we, we were just essentially saying, look, that's going to be we're pre-revenue, we're going to get hammered, you know , by people just, just complaining the entire time that we're not revenue. And that's the way they're , they're going to short our sh our stock, you know, there's going to, Oh, they're not revenue, they're not revenue. And that's all they're gonna do is stoke fear. So we were like, we're not going to go public, but what happened was the good old WIWORK scandal happened. Um, we work ruined it for most everyone in the private , um, the private market when it came to private market funding. Now, not everybody there's still money out there, but what we found is is that people would come in and they say, why are you not the next we work? You know, as soon as an investor walks in the door, they say, are you the next we work? And we're like, Oh my gosh, like, where's this coming from? Cause we never had that kind of, that kind of instant negativity walking in from investors. And so many of them just got, and I don't know if they were just posturing to get a good deal or if they were actually truly just worried about the fact that private companies can be a glass house that can fall. And what you saw with we work was is that, you know , as things started coming out , uh , all this, like there's just so many, there were so many issues everywhere that it just, it literally the house cracked and the whole thing fell. And with Niccola one thing that has been really good is , is that we're a very solid company with no with , with no, like there's no issues with the group , with the group. There's no, there's no fundamental problems. There's no law, there's no lawsuits. And only IP issues. There's, I mean, you know, we have to protect ourselves against others, but there's no like , uh , you know, there was no crazy deals done. I didn't, you know, that was the idea is that we wanted everyone to see everything about our company. And we brought in the , when we did this back , um, Gursky a guy named Steve Gursky came to us and he used to, he used to run , uh , general motors. And that's how I kind of have that history with, with GM. They see Gretzky said, Hey, Trevor, this side , um , we've got the best blue chips in the world, you know, that are willing to look at you right now. And we want to take you public. And I was just like, look, I , I don't know about that, man. It's like, you know, we're pre-revenue and they said, look, our investors are longterm investors in the green energy field. They don't care. They're here for the, they've been long on, on many of these other investments. Most of them hold their stock for 10 to 15 years. They have no desire to sell out. Some of them will sell some of them, if you do, some of them will sell a little bit of the portfolio if you do really well, because it will unbalance your portfolio. So just be prepared for that. If you do well, some of them are gonna move their sh you know , some shares, not all. And they, they , we sat down with them. We had every, one of them come in. We met with every one of these groups, you know, and I wish I could tell you all the names they have to, they have to, the ones that are public are PSM, fidelity, BlackRock, and others. And there's a whole slew of other ones that are, that are, that are there. And some of them are still not publicly making that announcement yet, but

Speaker 5:

They, you know, that was the idea that we said

Speaker 2:

Down with them . We said, look, we don't want to go because we're going to , you know, we don't want people sitting there bashing our stock. Um , and they said, we're not interested in selling. So this is, what's been kind of interesting over the last week or two, you've seen, you know, there's been a lot of people with the reports out there saying, Oh, we're going to NYCLA . Every one of them are selling. They're all even get out. You know, it's like this fearmongering , that's just unbelievable. And it's like, all the, all these investors are like, we have no idea what they're talking about and ain't us, who's leaving. Some of them do have to sell some shares because unfortunately, and fortunately we've performed better than anyone ever expected. So their portfolios are unbalanced. So you'll have, you'll have some shares going out and it'll, it'll obviously affect the , the, you know, the effect of stock just a tiny bit. But at the same time, you know, all it takes is one, you know, one good article by someone in the stock absorbs all of that. So that's just how the stock market goes. And, and , uh , the SPAC was , uh , you know, because they could get us public quickly and people could see all of our good and bad. And when you, when you unleashed the finances to the world, brilliant people, like you guys dig into them and they say here's issues, here's issues, here's issues. And luckily we've, you know, we've been able to have a good enough business model. It makes sense. And it's financially sustainable. So we've had a very good reception so far by, by investor saying, look, if you guys pull off what you say you're going to do in the next two years, Trevor, you're going to be as big as Amazon. So we'll give you two years. And if you don't, you're gonna , your stock's going to completely, you know, you're gonna , you're going to be miserable, but if you pull off what you say, you're going to pull off, it'll be one of the greatest success stories and we're in it for the long run. So that's kind of the story with the back .

Speaker 3:

Yeah. Speed to consummation of the transaction is certainly one of the prime benefits. I mean, in your case , um, you know, I'm sure discussions began , uh , well prior to this, but the deal was announced in early March and then closed in early June , um, which is a fairly rapid timeline for a transaction of this size. Did you know the vector IQ team prior to the initial discussions? Um , when Steve Gursky approached you and talk to us a little bit about the, the team there , what do they bring to the table? If anything, again, for the benefit of folks listening , um, you know, specs are quite often , um, put together by groups of more financial focused people, folks from wall street , uh, perhaps some management consulting. This is a little bit of a unique case in that a number of the principles are from within industry , um, from general motors, as you mentioned , um, it seems more on the technology side than the manufacturing side, but it correct me if I'm wrong, but talk to us a little bit about the nature of that group, your ongoing relationship and what that will bring to the company as it develops.

Speaker 2:

We never even knew. We didn't know anyone in that spec at all before they approached us. It was a, it was an introduction, I believe by either Cowen or Morgan Stanley. I can't remember which one it was, but one of them had introduced us. He said, Hey, we want you to meet with this group. They're very interested in you. They want to talk with you. And that was my first time ever beaten Steve Gursky and , and, and, and, or his entire in his entire group. Right. Great, great people inside that, inside that group. And one thing that they brought is they were, they were very, very specific in their spec. They're an automotive based spec . They have some of the very, very long standing guys, the , the former, you know, battery team inside of general motors, you know, Steve Gursky who used to run general motors. I mean, just very, very detailed guys. And they came in to do, they brought dozens of people in to do due diligence, and they, they beat the living hell out of us. And do be honest with you. It was a good thing for us because we had already been through that with financial investors, but we had never been through it with industry investors, where they were like, where , you know, an automotive group coming in, you know, picking apart everything you do. We had Bosch picking up, picking us apart on the supplier level, but we never had, like, we had Bosch on the supplier level picking you apart. You had, you had financial groups picking you apart, like , uh , like value act or other groups that are very, very , um, shrewd investors, but we never had a, a manufacturing , um, par partner besides, besides the VECO picking us apart. Because if that goes on the truck side , um, you know, the , the SPAC was on the, was on the automotive side. So it was a whole different level of criticism. And to be honest with you, with all those different criticisms from the supplier side to the, to the financial side, to the truck side, to the, to the automotive side, they prepared us to go public. And it's honestly, one of the reasons why we were stood so well, the barrage of, of, of , uh , criticism is because we were well prepared going into it by these experts. And we never knew them before, but dang, they've been a wonderful, you know , I'll tell you what I can go, Steve Gursky . And I say, this is the, you know, this is what I need to do. I don't know who I need a world-class paint manufacturing guy, or, Hey, I need to meet the president of this company. He's like, yeah, give me 30 minutes. And , and like the next day, I'm on the phone with the chairman of the, of that automotive group. And I'm just like, this guy is so well connected. It's an unbelievable, I'd never imagined how well connected he is. He is , I didn't even know what I was getting into when we brought, when we took on this bag , I just thought, Hey, these guys are good. They're former GM guys are gonna help us be better. I had no idea. I had a walking encyclopedia and, and , uh , and essentially like a phone book and network of the top guys in the world. And, and anyone I need to get ahold of usually see Gursky can do it. So it's pretty cool to it really neat to see how much help they've actually given us. They're very active. I'm on the phone probably every other day with Steve Gursky . So they're a very active SPAC . I'm not sure if everyone's like that. All I know is my experience.

Speaker 3:

So let's talk about the actual money that was raised. Um, you had the transaction with vector IQ , uh , that then became listed as, and KLA. Um, how much of that cash that was raised , uh , first of all, what was the total amount? Um, how much of it was funneled back into the company , uh, to fund future growth and the, and the plans that you outlined for investors, how much went to you and perhaps some of the other , uh, early investors , uh, that were , uh, needing or wanting to cash out, maybe give some characters to the extent that you can have those details.

Speaker 2:

Yeah. Happy to. So I'll start with the one directly about me, cause I think that's an important one for everyone to understand. And it's the one I, I like to get out of the way really quick for everybody just to be open. So when we did this deal, there was a couple of things that the, that the blue chip investors wanted. Um, they're the one they did not want the CEO to be the executive chairman at the same time. They felt like there needed to be a separation of powers and a more of a board , um, a balanced board. And the problem was they've seen in the past is whenever you get the CEO and the executive chairman being the same person, that person becomes almost a little crazy. They don't have the ability to think, or to listen to other people because they have too much control and too much power. So, and to be honest with you, I didn't want to spend 30 hours a week doing paperwork. So I'm not a paperwork guy. I'm a vision guy. And I really love technology. I love vision. I don't want to be doing paperwork 30 hours a week. So my great friend Mark Russell is , uh , I talked with him. He was our president and I said, Mark, I want you to be the CEO because I don't want to be the CEO. Cause they asked me, they said, Trevor, we need you to be one of the other, which one do you want to be? And I said, I don't want to be the CEO. I want to be the executive chairman. And in the agreement we got the board and everyone to approve that the executive chairman can assume any role at wants at any time, whenever it needs and all, all, all roles report directly up to the executive chairman through the CEO. So in other words, the CEO reports directly to me and I have the ability to , to assume or manage any division, any person, any, any anyone inside the company, any given time I need to, because they believe that I have, I have more knowledge and more vision than anyone in the company. And so they wanted to make sure that I had no restrictions on that. But at the same time I was, I was being honest enough to delegate to people that could be better than me at certain things. And so that was kind of a requirements. A lot of people say , Oh, why'd you? Why you're not the CEO anymore? Why did you step down? Well, I didn't step down. I stepped up. I didn't want to be the CEO anymore. I wanted to be the, I want to just stay the executive chairman and just be, be happy. They're doing what I do. So that was one thing. The next thing was, is when , when we were doing the deal , um, they wanted , um, the , the spec and the pipe wanted different things from me, including , um , more commitments. And with that came , um , different lockup restrictions that other people did not have. And so the SPAC had said, Hey, look, we're buying, you know , we're buying chairs. And this was before we ever went public. So we thought that the, you know, we had, we thought that the value of the company was going to be, you know, was around at that time, we thought that, you know , we're going out public around that 10, $11 . Oh , it was like $11 or something like that on 10 something, 11 something. And so they said, look, we want to buy some, you know, let's , uh, let's, let's have you take a little bit of money out, so you can focus on the company. You're not stressed out of your mind. And they paid me exactly what they bought the other sheriffs for. So at that time he was like, you know, I think it was around 10 or $11. So , um, they were, there was $70 million that I was able to , um, that I was able to cash out at the time. And it reduced a little bit of my power, a little bit of voting rights, which is what they wanted and also move removing me away from the CEO to , to stepping up to the executive chairman and was just a, was a balance of the, of the powers that they wanted. They felt like it would be a healthier company with a balanced board and a balanced executive team. So we did that and all of the executives at the time agreed are one thing is not even talked about, which is pretty crazy. And I'm really surprised people have not given us credit for it. There's not a single executive in our C suite that that makes more than a dollar. We all agreed to take $1 and we're all stocked bonused only. And it's really incredible because you know , none of the critics out there even given us credit for that, I don't know of another executive team in the world that I know of. Maybe there is in a publicly traded company where everyone makes $1. That means the executive chairman, the CEO, the CFO, the ch aro, which is the human resource officer and the chief legal counsel , all five of us make $1 a year. We're fully committed to this company. So when people kind of criticize that, I go, Oh, you cashed out some money. You're , you know, you're scamming people, listen, this is when you build a business, you expect to be rewarded. I've been in this for five years. There's nothing wrong with having a little bit of reward. Did we sell, you know, I sold it the exact same price everyone else did at the time. So it wasn't, and we had no clarity in the company that, you know, that the company would eventually rise like it did. And , uh, and you know, so that , I hope that helps give a little bit of a background on that to everyone. And , uh , about those questions , um, what were the, there was a couple more you'd asked me. And unfortunately, I , I , if you can even re-ask those for me, because I just couldn't make

Speaker 3:

Piece of that. And thanks so much for the transparency. Um, the other piece of that was , um, you know, the remainder of the cash being funneled back into the company to fund growth. Maybe you could give a little color on , um, you know, how much runway that 700 million remaining that kind of went back into the company as a result of this race. Um, what sort of runway that gives you?

Speaker 2:

Yeah, so we had 500, a little over 500 million plus 235 in the specs . It is like 735 million. I think ish that came in. I think when we closed the deal, we had somewhere around 70 or 80 or 90 million in our account . So, you know, it was probably around 800, 800, 850 million when we, when we , uh, when we completed the SPAC and the pipe , uh , in our account. And obviously you have all the warrants as well. Um, and so those warrants will come online and that'll be another, you know, if we decide to go cached on the warrants, that's another couple hundred million dollars. So we should be sitting in, you know, if , if that's the direction we go, we should be sitting on over a billion dollars of cash. And obviously that's not enough to, to, to do what we need to do, but it's a huge runway. And it's an, you know, it's nice to have a billion dollars of cash on your account. That's not a , I know, and nowadays there's numbers being thrown out everywhere, people raising billions at a time, and that's, it's only happened recently in this world, a billion dollars of cash is no joke when it comes to amount of, to have on your books. Um, so our burn rate right now is really, it kind of, we don't have a lot of internal burn rate because we do a lot of outsourcing with engineering, with like Evaco and other groups. So our internal burn rate might, you know, might only be five or $10 million a month when it comes to when it comes to like all of our own employees in different things. But external burn rate varies greatly depending on who the outside engineering groups are working with us at the time. So you've got some pretty big expenses there, but that burn rate would be, you know, is , is , you know, is a , and I'd have to ask our CFO exactly what that burn rate is, but it , the billion dollars is it gives you a lot of, a lot of runway. And obviously at some point we will let you know, we'll look at other ways, whether we do, you know, do we want to do some convertible notes? Do we want, how do we want to bring in additional capital? Do you want to go to the equity markets? Do you want to just do private placements with groups wanting to buy boxes , shares? There's a lot of options we, we, we can look at, but there's no doubt we're gonna, we're gonna , um, we're gonna make sure that we're well capitalized going into the future. Um, and even more well capitalized than a lot of our competitors. It just, it's all about timing. We want to get a few things out and make sure that everything in the company is very stable. And then we'll look at the different financing options to increase the cast balances from a billion on up .

Speaker 3:

All right . So let's maybe pivot a little bit into the financials under the strategy , uh, that we see with Niccola . Um, you've described a couple of times on this interview, how you've been able to reach out through strategic partnerships or through licensing , um, talent technology resources outside of Nicola directly. Um, and for those of our listeners that may have heard you in other interviews , uh , you've talked about this a lot as well, often, very humbly , uh, you know, you've indicated, Hey, we've, we've relied on the talents of others and the expertise of others and pulled that in. Um, there's a little pattern recognition there, which is , um, you know, Nicola essentially, if I may say is fairly asset light and probably fairly people light. And one way that , uh , I kind of come to look at it is that , um , you and the company are really very highly skilled matchmakers, perhaps more than anything else. And as a result, you now have this company that is publicly traded. Um, as you've mentioned, pre-revenue and reaching a valuation of, you know, approximately $20 billion, depending on the day you come from what sounds like a fairly conservative background. And , and you've talked so much about the conversations with your father about, you know, true value. And , um, this must be very surreal for you. How do you square all of this?

Speaker 2:

Oh, it's really crazy. I mean, I, you know, I think what you put, what you just said was, was a very good analogy of, of, of us. We are really good matchmakers. Um , and this is what, cause here's the thing it's amazing when, you know, when you're humble about when you're humble and you tell people about like your , the things that you're not good at, it's amazing how much criticism you get online. You know, I know you have to, you have to, you have to block out all the haters. I get that. But I'm just being honest with you guys here. You know what, I've talked multiple times about how important it is to find people that are smarter than you to work with you. And it's amazing how many people come and criticize you for that. They're like, Oh, you're , you're just an idiot. You don't know anything. And it's like, you're hiring people better. Like you're , you're not even, you know, you're an idiot. And I'm like, I'm just never really understood that, you know, cause I was born in a family or, you know, like my family always raised me that, you know, you've, you've got to look at, you gotta find people that are, that are good at what you're not good at and find those people and bring them into your life and , and then be honest and work hard. And then you're going to be, you're going to be, you know, you're going to do something good in life and we really are matchmakers. But the thing that's interesting about is we're about three to 400 employees , 300 plus employees here in Phoenix, right? So we've got, but these people are our core critical people will have about probably by year's end. We'll probably have 450 here. And by next year we'll probably have about a thousand, these thousand people or the four 50 by year's end are the critical aspects of Niccola . These are the highly sensitive, important areas of NYCLA . We don't get into everything else. Now this is just a business decision we made from day one. I don't know whether or not it's going to play out the right way. I believe it is because I've seen the results of it so far, but we take a totally different viewpoint of our, of our competitor, you know, our competitors. And we're, if you think about it, we really use a lot of other people for things that are not as important to us. So all this stuff that's important. Let's talk about what is important, important is controls of the vehicle software of the vehicle. Um, the, the over the air updating the security, the core IP around axles batteries, inverters , um, vehicle control units, all that is done in house at NYCLA . So when there's a lot of people out there that think, Oh, Nico doesn't do anything themselves. That's totally not true. It's a complete, that's a complete fear mongering effect of our competition's followers. And they it's, it's, it's really sad because we actually do everything that's important in house. But what we don't do is the stuff that doesn't matter. We don't make, there's no reason to go make , um, you know, make your, make, make these different parts of a vehicle. We don't need to make windshields ourselves . We don't need to make seats ourselves. We don't need to make, there's no margin in those things. There's like, you know, you're going to make 8% to 10% margin. Why even care that with the amount of a capital expenditure and the decades, it takes to write that off, to get it to where you have a balanced business model that we just don't do. These things that don't matter to us, we outsource all this stuff that does not matter. And we do everything in house that does matter. And to get to where we are. I think we've done a pretty good job and we've seen it be very rewarding. So yeah, we're $20 billion company ish today. And with everything coming out over the next four months, I believe Nico is going to be one of the greatest growth stories. Um, you know, it can be one of the top, I think, in my opinion, one of the top, you know, maybe five or 10 greatest growth stories in American history because I know what's coming and I know what we're doing. And I know, you know, there may be a little bit of fear, you know, short term because people are like, you know, we're, pre-revenue whatever, but I would not bet against Niccola at all. And these following, you know, the, the following , um, a period of time in our life and is because it's just because I know what's coming, I know how solid our model is. I know what , what deals we're working on. I know how well we've thought out the business model and I know how profitable it is and the investors are rewarding us, us handsomely. And we're one of the only SPACs where you saw the base actually hold, if you look at when, when a lot of the , uh, the fear happened a lot, there was multiple articles that came out to bash us and it's okay. But there is a huge pressure on our stock. And it went from, you know, went from a 55 sixties or whatever down to about the 40 range. And it held, it held from the barrage. And that was a miracle. Like no one, no one knew where the floors were going to be. Cause we're a new stock. Right. And we got a call from that , some of our partners, and they said, what we just experienced was miraculous like well done and incredible. They see so many people excited about NYCLA because the floor held and it bounced right back up. And so I'm a really, really excited about this. It's hard to comprehend. It's hard to think, wow . You know, we're a $20 billion company worth more than our competitors and we're pre-revenue. But what our society is doing right now is they're rewarding us for changing the world for the better while being financially sustainable. That is why people love us is we, our business model is financially sustainable without the government credits coming into to prop us up. And so I think that's a, that's an exciting thing is that we're, we're , uh, we're actually really focused on actually being financially sustainable. That's our business model make money.

Speaker 4:

Trevor, you've been incredibly generous with your time. We had three objectives when we sat down to record this podcast , um, the first was really intelligent discourse. The second was nobody listening would think we went soft on you just because you're the richest person we've ever had on the podcast. Uh, and the third was that , um, after you were done with us, maybe you would feel like this is a show that you would want to come back on. And I hope that we , um , through this discussion with you have achieved all three objectives.

Speaker 2:

I I've been very happy with , uh, with how you guys set up this, the, you know, this , uh, this podcast interview, how you guys have executed it, the communication up to it, the good hard questions I even gave out. Some information I would normally not give out, but I wanted you guys to know how, how far deep I've thought into this stuff that we've looked into this, and we've, we've gone down that rabbit hole in these different things to make sure that we're protected with our business model. And some of those numbers I would never give out, but I did give out to you guys. Yeah . Would you be in that's because you guys have been very, you know, very, very open, very respectful, very, you know , good with the time. I really appreciate it. Thank you. And yes, I would. I would gladly come on , um, again with you guys. Terrific. Well, we'll look forward to that, Trevor. Thanks so much and all the best. Hey, thanks so much everyone. I appreciate it,

Speaker 1:

Nicola. And Tesler not exactly separated at financial birth, but who knows in the long run, how much either company will be worse . Let us not become too fixated with either company share price. Big picture. There sure is a lot of money trying to take down my beloved ice Ilan and Trevor don't let wealth go to your head. As John Maynard Keynes spins in his grave. Remember in the long run, we're all dead.