Nikola's journey from notion to Nasdaq

In just six years Nikola Motor has gone from an idea conceived in a basement to a startup hunting for cash to a globally merged company headed for a listing on the Nasdaq. Along the way, founder and CEO Trevor Milton realized the shortest path to success is a straight line — more specifically, a vertical one.

It's a journey that has involved a very strategic approach to ensuring Nikola's long-term profitability amid the challenges new mobility startups face to remain financially sustainable.

Since officially launching in 2016, the Phoenix-based company — which builds hydrogen- and electric-powered trucks — has made vertical integrations a core part of its business strategy while continuing to expand.

"One of the most important factors with Nikola is that we did vertical integration with everything," Milton tells Shift. "Everything — from our supply chain for the truck, to the production of the hydrogen, to the delivery of the fuel to the customer, to the service, to the warranty — will all be controlled and housed by Nikola."

The strategy has helped Nikola achieve a $3.3 billion valuation.

In March the company merged with the publicly held investment and advisory firm VectoIQ.

A pivotal component of Nikola's business model is solidifying strategic investment partnerships with key suppliers to help lower the cost of building trucks.

"There are tens of thousands of parts on a truck that have gone through certification at one point in its life," explains Milton. "Those parts are all a couple of million dollars to certify, each, and they take one to two years [to build]. With the partnership approach we were able to avoid all of that."

Nikola's growing list of major supply partners includes CNH Industrial's truck division, Iveco, which engineers Nikola's braking and stability control systems; NEL, the company's hydrogen fueling partner; Bosch, which provides a lot of the software and engineering systems for Nikola trucks; Ryder System, which will handle service and maintenance for all Nikola fleets in the U.S.; and Meritor, which provides regenerative braking systems for Nikola vehicles.

Iveco will also manufacture the first Nikola Tre Class 8 trucks from its plant in Ulm, Germany.

In addition to a robust supply chain, Milton attributes Nikola's success to the lower cost of hydrogen, in comparison with diesel fuel, and some unpredictable factors in the world of transportation.

"The political winds were perfect for us," says the Nikola CEO. "The Volkswagen 'Dieselgate' was perfect for our business case. All these things happen, and without them, I don't think we would be here."