Thread by @ElectronComm, 1/ This thread reviews $NKLA CEO Trevor Milton’s appearance on Autoline After [...]

1/ This thread reviews $NKLA CEO Trevor Milton’s appearance on Autoline After Hours. Disclosures: no H2FC sector investments, no commerce with Nikola (but like Tesla, they gave me swag once). I listened to the podcast version. http://www.autoline.tv/journal/?p=68431

2/ Summary: Milton is the red-state Elon Musk. He studied the playbook and found his opportunity, but drafted a deeper bench and is a better public speaker. Hostility from $TSLA fans will only push more non-Californians into Nikola’s orbit; it's identity politics 101.

3/ Milton handled himself ably. A dash of spice (swearing) and the mundane (family interruptions) added humanity. Musk would not have done better. That’s because Musk is a preacher, while Milton is a missionary.

4/ Preachers preach to the converted. Many are terrible at outreach. They’re trapped in their worldview, imprisoned by epistemic closure. That’s Musk: he plays to his base, mocks outsiders, and unpersons critics.

5/ Missionaries win new converts. The best listen to people, find the needs, speak their truth, collect their slings and arrows, and come back for more. Milton addressed outsiders, fielded un-screened questions, and focused his disdain narrowly.

6/Life is case-by-case of course, but the missionaries usually win. In business terms, missionaries steadily grow your TAM; preachers eventually offend enough people to shrink it. Consider the blue check rebellion after Musk’s Covid “sense apnea”.

7/ Podcast time:
5:30 asked about “the haters”, Milton gave a polished response, graciously deflecting Elon Musk’s hostility. He speaks in complete sentences; few ums and uhs, little stuttering. A compelling speaker.

8/ 6:45 uses Nikola’s (BEV + FCEV) approach to argue it’s uniquely qualified to give customers the best solution. Perfect rhetoric/salesmanship, even if everyone else in the industry is doing this / starting to do this.

9/ 10:00 skillful pivot from lordly boasting to a legit Big Win: getting Bosch as a partner so Nikola wouldn’t repeat “Elon’s Inferno”, a descent into the 9 Quality Circles of Manufacturing Hell. Started off iffy but he stuck the landing.

10/ Nikola’s relationships with Bosch (stack? and drivetrain), Nel (hydrogen), Iveco (mfg … to start at least), Ryder (service) and others significantly de-risk their (still risky) ambitions. On paper at least, it's the right strategy.

11/ 16:00 point of information: a big reason to put BEVs/FCEVs into an existing chassis is to replace diesels during mid-lifecycle rebuilds. Packaging is much more challenging, yes, but you can displace more diesel, faster.

12/ 18:00 Pelosi-esque clap-back at Musk. Paraphrasing, “You can’t be environmentally sustainable if you’re not financially sustainable. When that bubble bursts, when there’s no more gov’t money, the whole thing’s going to come crashing down, wiping out trillions in wealth.”

13/ 21:45 Black-belt rhetorical flip of Tesla fan skepticism about H2 infrastructure. He’s done his homework; he nails the tough questions; and he doesn’t resort to Musk's go-to of humor/bombast as an escape hatch. Legit impressive performance... so far.

14/ 22:30 First fumble. Power from the “federal grid”?

He probably means that Hanwha (solar) + RPP’s (?) will give Nikola cheap electricity (true enough). He’s probably cherry-picked his counter; CA’s residential rates must be among the highest in the US.

15/ A big reason for the price discrepancy is that a big portion of your residential electric bill isn't Generation, it's Transmission & Distribution (the wires of the grid, the transformers on your block, etc.).

16/ 24:00 paraphrasing, “Anyone who is objective and is not emotional, and truly believes in zero emissions, they’ll love you. All the people that hate you, and bash you for #hydrogen, all they care about is being a fan cult. That’s all it is.” He can throw down.

17/ In truth, batteries are at huge scale now, whereas green H2 and fuel cells aren’t - yet. We should run with batteries as far / fast as we can -- but this does mean there are more “doublings” to come for H2FC than for batteries.

NOT INVESTMENT ADVICE. BUY GOLD! (lol)

17/ In truth, batteries are at huge scale now, whereas green H2 and fuel cells aren’t - yet. We should run with batteries as far / fast as we can -- but this does mean there are more “doublings” to come for H2FC than for batteries. NOT INVESTMENT ADVICE. BUY GOLD! (lol)

18/ 43:00 consistent with de-risking and not “boiling the ocean” doing everything themselves having an experienced OEM (or a Magna) manufacture the Nikola Badger (if there're enough reservations) is smart. Will be key to balance designer kimagure with manufacturing jidoka.

19/ 49:30 Nikola product line extension into powersports makes exquisite sense – one brand for all your motorized mobility. Then it went sideways

for … most of the rest of the show. In this sense he started strong but tailboned the landing.

20/ 55:30 Savvy technique of praising for incumbent OEMs’ hard-working employees while taking shots at leadership teams for being dinosaurs. But unlike (12, 16) this time it cost him gravitas. Maybe the slight from a Daimler exec got under his skin?

21/ 59:00 Profound insight on customers’ desire to be connected to their brands. Depending on your proclivities you might call this “full spectrum (social media) dominance”, “The Kardashian Way”, or Steve Bannon’s “flood the zone with shit”.

22/ Overall a compelling performance, even if the last portion was uneven. On paper, Nikola has a sound strategy, and have set themselves up as the ZEV brand for non-Californians / non-Tesla stans. Of course, execution is everything.

23/ A soon-to-expire lockup period will expand the float, probably hitting the share price. But with $700 MM in cash and Iveco doing their first trucks, they've got runway. Good business models aren't always good stocks short-term, and vice versa:

24/ Their model of lease financing (for vehicle, maintenance, plus fuel) should indeed be far more lucrative than simply selling vehicles. Their hydrogen fuel cost will steadily drop over time. That said, OEMs and energy companies trade at dull multiples.