From Walmart to Nikola: 10 questions for Elizabeth Fretheim
Elizabeth Fretheim has spent the last couple of weeks unpacking moving boxes and adjusting to walking her dog in the dry Phoenix heat. The former senior director of supply chain sustainability for Walmart recently left the retail behemoth after a decade and made the cross-country trek to join five-year-old clean truck startup Nikola Motor Company.
The weather will be just one change for Fretheim. Nikola is developing hydrogen-powered electric semi-trucks to sell and lease to shipping companies and corporate fleets. The trucks — which are supposed to go into production in late 2022 — will be able to move goods with zero emissions and save companies on diesel fueling costs. The company also plans to build out hydrogen fueling stations across the United States to fuel the vehicles, and it has teamed up with Ryder to provide on-demand maintenance and servicing.
Fretheim, as head of business development, will act as liaison between fleet managers and Nikola, she told us, helping the company build products that will serve their needs. At the same time, she'll help the fleet operators understand the potential of hydrogen-electric trucks, a technology that hasn't gained much traction so far in the United States.
Nikola has a couple of big years ahead of it. The company plans to raise more funding, build out its factory in Arizona, install hundreds of hydrogen charging stations, get to commercialization and meet the demands of its sizable number of early orders. This week, Nikola is holding a two-day event, Nikola World, meant to show the world its products and plans.
On the eve of Nikola World, GreenBiz talked to Fretheim about why she made the move from the world's largest company to a startup and what she learned helping Walmart embrace more sustainable shipping. The following Q&A has been edited lightly for length and clarity.
Katie Fehrenbacher: Why did you want to join Nikola, a young auto-tech startup, after many years as the senior director of supply chain sustainability for Walmart?
Elizabeth Fretheim: Growing up in Alberta, Canada, where the main industry was oil, sustainability became a passion of mine and looking at how ... we transition to cleaner energy. As all of your readers will know, we’re a little bit behind on our climate goals, and when I was looking for something new, I really wanted to find somewhere where they were looking at a revolution in transportation and technology.
I don’t think we have the time to just evolve what we’re doing. We need to revolutionize. I wanted to find [an organization that] was looking to move fast and find sustainable good solutions that move as fast as they can. Nikola was doing both. I really wanted to work with them to try to use my experience and passion for sustainability to help them move faster, if possible.
Fretheim: A truck isn’t a truck isn’t a truck. The transportation industry, especially the freight movement industry, is very complex and diverse. The trucks are different, the regulations are different, the driver considerations, what’s the business, what’s the duty cycle ... it’s a very complex industry. You have to be prepared to be able to deal with that diversity in your solution.
This is going to sound obvious, but these trucks are mobile. You can’t think about where that truck starts or parks at the end of the day; you need to be able to service the truck many, many miles away from where it spends the night.
These trucks are also a tool for the business. Even though I am very focused on transitioning to cleaner energies, at the end of the day, the vehicle has to do what the business needs it to do. It has to be able to carry that freight. It has to make it from point A to B. It has to be safe. So it’s not just about transitioning to clean energy; you have to think about the full package.
Cents turn into dollars very quickly in this business. If you’re talking about a cost-per-mile, just a few miles out of route, just to go to a fueling station, can make a big difference for some of these companies. So I think even though I am very passionate and focused on transitioning to clean, it has to be well integrated into the business that we’re solving for as well.
Fehrenbacher: How does the clean truck market look to you right now? Is it reaching some kind of tipping point or are we still more in the early days?
Fretheim: I would say it’s both in different ways. For the tipping point, I would say there is clear interest and commitment and momentum for looking at these solutions. Even just since I’ve been here, I’ve had so many of my contacts at my prior life reach out and want to know what we’re doing and how they can get involved. I think, as one of my colleagues said, we’re riding the crest of the wave.
At the same time, it’s very early days. There’s a lot to figure out: the technology; the infrastructure; regulations; standards. But I think that’s also part of what makes this very exciting. We’re working from a clean slate here at Nikola, too, which sometimes can be more difficult, but sometimes you’re not tied to the way things were.
Fehrenbacher: Do you see a variety of technologies playing different roles across the different truck applications and drive cycles?
Fretheim: I do. I think each technology can have its best duty cycle. We talk often about it being a poly-fuel future.
For hydrogen and fuel cells, there’s definitely an advantage if there are longer routes or even if a truck is doing several runs in a day. Hydrogen [technology] can do anything that diesel can do but it’s zero emissions, it’s quieter and works well in cold weather. We need to help our customers understand the technology and how it fits in their business.
Fehrenbacher: What’s Nikola’s advantage? What’s the pitch for some of these fleets?
Fretheim: I am super excited that they are really looking at this from scratch. They are building these trucks from the bottom-up to be hydrogen-fuel-cell trucks versus retrofitting a diesel truck or even a natural gas truck. They’re really looking at what they need to do to optimize the truck and the service for hydrogen as a fuel. And so I think that’s one of the biggest advantages. They are pioneering this, and they’re doing it in an aggressive and creative way. At the same time, they’re working with great partners to make sure we are building sound, reliable, sustainable technology.
Fehrenbacher: What do you think are the biggest challenges for startup automakers building clean trucks, other than the obvious startup challenges, raising money and being a new company?
Fretheim: The infrastructure is a big piece. You have to build a manufacturing plant and put in a maintenance-and-parts service network. And there are all of those complexities we talked about: each of your customers is different, and you can’t necessarily just build one solution. It’s going to be different for every customer.
Also gaining the confidence of the customers. A lot of these OEMs have been around for many, many years, and they’ve built good relationships and loyalty with their customers. And rightfully so — they’ve built a great product that has continued to improve. So we need to start to build confidence with the customers [proving] that we have the product, have that infrastructure and we can service them well.
Fehrenbacher: How should companies like Walmart, big fleet providers, look at working with young startups like Nikola?
Fretheim: You can add a lot of complexity into their business if you can’t service nationwide or if you're adding a lot of complexity into the training of their technicians or parts inventory. I think my experience at Walmart, and looking at how can we make sure this is seamlessly integrated as much as possible into the current operations, is going to be important. We want to make sure that our customers feel like when they put one of these trucks out there, if something happens, the wheels can turn quickly again.
These trucks are a tool for the business, and they’re making money when the wheels are turning and they’re hauling their load. So if we can help them feel good and we have the infrastructure to support them, that’s going to be key.
Fretheim: Cost and uncertainty. Diesel trucks have been around for many years, and people understand the technology and understand when something is going to break and how ... they prepare for and deal with it. Some of these new technologies are very complex and high tech, and that can be somewhat unnerving for the [fleet operators].
That uncertainty along with everything else going on in the industry right now is a lot for the fleets to be dealing with. It can be very overwhelming and sometimes when something is that overwhelming, it is very easy to say, "I don’t want to deal with this right now." We’re simplifying this so it’s easy for them to make the switch.
Fehrenbacher: Do you see pressure coming from the end customer wanting to have their supply chain be more decarbonized in terms of shipping?
Fretheim: One of the things that surprised me when I got here [to Nikola] was the diversity of the inquiries from everyone from shippers and large fleets, all the way down to much smaller fleets that are very interested in this technology. I found that to be promising and exciting. That's going back to how we’re at a little bit of a tipping point in terms of interest and looking at these technologies.
Fehrenbacher: Without revealing too much, why should the industry be excited about Nikola World?
Fretheim: There’s so much. There’s been a lot of uncertainty about the technology and what it can do. You're going to come to Nikola World and see it work. Hopefully, that will get customers excited about the technology and what it can do and see that this is real. This will be a solution for them and for the goals that they are trying to get to. That’s super exciting. You'll also get to find out more about what they’re thinking in terms of the stations and the business model.