Tom’s Truck Center is continuing its green streak by adding to its EV lineup.
The Santa Ana-based commercial truck dealer, which has been in business for over 70 years and sells a variety of new and used vehicles, recently added offerings from EV truck maker Nikola Corp. (Nasdaq: NKLA), which made local headlines last October through its purchase of then Cypress-based battery maker Romeo Power.
As of last week, the commercial truck dealer featured seven of Nikola’s heavy-duty battery-electric trucks out of 10 EVs on sale. Nikola’s hydrogen fuel cell trucks will also be available at Tom’s by the end of the year, officials said.
Nikola trucks start in the $300,000 range, according to news reports. Tom’s hasn’t disclosed pricing for its local offerings, though CEO K.C. Heidler said he expects the company will surpass $100 million in revenue this year with the help of its new, pricier Nikola trucks.
Emerging Market
The Nikola deal enables Tom’s to cover more ground in the emerging EV truck market.
The global market for EV commercial trucks topped just $392 million in 2020, according to Allied Market Research. It’s expected to reach nearly $4 billion at a compound annual growth rate of 26.4% by 2030.
Other local firms looking to make inroads in the commercial EV sector include Irvine’s Rivian Automotive Inc. (Nasdaq: RIVN), which is making a fleet of delivery vans for Amazon, Anaheim’s Phoenix Motor Inc. (Nasdaq: PEV) and Karma Automotive in Irvine.
EV Truck Market
EV offerings started out at Tom’s as a goal the company set about five years ago.
At the time, it brought on Hino hybrid commercial trucks, which run on diesel and electric batteries. The dealership’s Hino vehicles then received a boost from California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), which encourages EV sales by offering price breaks from $20,000 to $240,000, according to HVIP’s website.
HVIP incentives continue to be a boon for Tom’s customers. Nikola’s HVIP incentive starts at $120,000 and goes up to $200,000, Tom’s CEO Heidler told the Business Journal.
The trucks at Tom’s dealerships—including a variety of cargo vans, delivery trucks and moving vans, among others—are currently about 90% internal combustion engines, while the remaining 10% are EVs or zero emissions..
Tom’s was among the first dealers to offer vehicles by upstart EV commercial truck makers, such as GreenPower Motor Co. (Nasdaq: GP) and Ree Automotive Ltd. (Nasdaq: REE).
Of the EV brands in Tom’s inventory, “Nikola, I think, has the best chance to survive and do really well in the marketplace,” Heidler said.
Nikola Outperforms
In vetting Nikola’s EV trucks, Tom’s participated in several ride and drives in Long Beach, where Heidler witnessed vehicles from the EV maker vehicles outdrive the trucks from competitors such as Volvo, Peterbilt, Kenworth and Freightliner.
Nikola’s battery-powered EV truck is expected to get 330 miles on a charge while the company’s fuel cell EV is projected to last 500 miles on a tank of hydrogen, according to Tom’s officials.
The Tom’s team also took the time to familiarize themselves with Nikola’s manufacturing facilities and current leadership as they were in negotiations with the EV maker.
Heidler met with Nikola’s current CEO, Michael Lohscheller, and was happy to learn that “he’s ran car manufacturers for the last 20 years of his career.”
“He knows what he’s doing and how to build a good dealer distribution system with his product,” Heidler added. “So, we felt really comfortable after meeting with him.”
Apart from Nikola hydrogen fuel vehicles, Tom’s plans to add EV trucks from Hino and Isuzu, whose commercial truck unit is in Anaheim.
Nikola Founder Lawsuit
Getting Tom’s to sell Nikola trucks was an uphill battle for the EV maker, due to a fair amount of bad press the past year, including the recent conviction of its former chairman and CEO, Trevor Milton.
Milton was convicted of multiple counts of fraud last year for deceiving investors about the capabilities of Nikola’s trucks.
“When they approached us, we were skeptical at first,” Heidler said. “But once we learned about the operation, we’re comfortable with them now.”
Tom’s did extensive vetting of Nikola’s battery-powered EVs and zero-emission hydrogen fuel cell trucks before agreeing to add them to its dealership, he noted.
Nikola officials told Heidler that Milton has been banned from doing business with the EV maker. As of the end of March, Milton still held 8.8% of the company’s stock, filings indicate.
Nikola last week was valued at $429 million at 60 cents a share. That’s 93% down from the stock’s 52-week high last August.
Nikola did not reply to requests for comment.
Family Business
Though Tom’s Truck Center’s addition of Nikola Corp.’s trucks and other EVs is recent, the history of the Santa Ana-based company dates back decades.
K.C. Heidler’s father, George Heidler, bought Tom’s Towing and a commercial truck business more than 40 years ago.
Tom’s Towing, founded in 1949, had been around for so long that the Heidlers kept Tom’s name on it.
“George wanted to keep it personal,” K.C. Heidler told the Business Journal during an interview in 2009.
The younger Heidler joined Tom’s in 1990 to help his father with the business. K.C. Heidler has served as president and CEO of Tom’s since 1991.
