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Nikola + Edison Develop Batteries and Battery Chillers Together
[Para 4, Statement of Agreed Facts] Nikola entered into an agreement with Edison to supply components for the Model E. A dispute has now arisen as to the terms of, and the parties’ liability under, the contract. -
Edison Approves Design of Battery & Chiller
[Para 10, Statement of Agreed Facts] Edison approved the design of the battery and chiller on 1 January 2016. -
Contract Formed between Edison + Nikola
[Para 14, Statement of Agreed Facts] Audrey Member, Nikola’s General Manager Sales, met with Karlina Benz, Edison’s Chief Procurement Officer, to discuss Drivechain and make arrangements for the smart contract that would define their commercial relationship.
[Para 15, Statement of Agreed Facts] The parties agree that a contract was formed at the meeting of 3 March 2016 but, as noted, they do not agree on its terms. -
Ms Member (Edison) Meets With Ms Benz (Nikola)
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Period: to
Edison Launches Model E
[Para 3, Statement of Agreed Facts] Edison’s most recent model, the Model E, is a semi-submersible amphibious ‘driverless’ vehicle. It was launched in October 2016. -
Chiller & Battery CLSs Dropping Significantly
[Para 21, Statement of Agreed Facts] However, in June 2017, chiller and battery CSLs started dropping significantly. -
Ms Member (Edison) Emails Pey Nhut
Email written in advance of meeting between Ms Member & Ms Benz. -
Period: to
6 Model E's Report CLSs < 75
[Para 21, Statement of Agreed Facts] 6 Model Es reported chiller and battery CSLs below 75. Drivechain identified a fault in the chillers on the basis that:
a. flow meters inside the chillers indicated that refrigerant was continuing to flow despite the chiller’s controller commanding its pump to stop pumping; and
b. battery temperature sensors recorded temperatures below the proper operating temperature range. -
Period: to
Nikola Shipped 3 987 Replacement Batteries + 3 360 Replacement Chillers
[Para 28, Statement of Agreed Facts] Between 1 June 2017 and 5 September 2017, Nikola produced and shipped: [28.1.] 3,987 replacement batteries, at a total cost to it of $37,399,016.88 ($9,380.24 per unit); and [28.2.] 3,360 replacement chillers, at a total cost to it of $7,041,312.80 ($1,614.98 per unit). -
421 Model E's Report: Chiller CLSs Below 70, Battery CLSs Below 75
[Para 23, Statement Agreed Facts] By 15 June 2017, 421 Model Es reported chiller CSLs below 70 and battery CSLs below 75. The chiller OCSL dropped from its pre-November mean of 93 to 72. The battery OCSL dropped from its pre-November mean of 94 to 83. -
Nikola Unsuccessful Software Update
[Para 25, Statement of Agreed Facts] On 16 June 2017, Nikola pushed a software update to all chillers to address what its engineers thought may be the issue. The update did not rectify the fault. -
Period: to
4 144 Model E's Report: Chiller CLSs < 50, Battery CLSs < 70
[Para 25, Statement of Agreed Facts] Between 16 June 2017 and 2 August 2017, 4,144 more Model Es reported chiller CSLs below 50 and battery CSLs below 70. Chiller and battery OCSLs continued to drop. -
All Chillers Produced After 22nd June '17 Included Valve
[Para 26, Statement of Agreed Facts] Simultaneously (as Nikola pushed out the unsuccessful software update), Nikola’s engineers were amending the design of the chiller to include a check (non-return) valve at the refrigerant intake. The valve would stop refrigerant intake altogether in circumstances of low temperature. With Edison’s approval, Nikola altered its production line. All chillers produced after 22 June 2017 included the valve. -
Drivechain Total Recall All Model Es
[Para 27, Statement of Agreed Facts] On 2 August 2017, the chiller OCSL dropped below 65. Drivechain initiated a total recall of all Model Es and directed that the balance of chillers (19,405 units) be replaced at Nikola’s cost. As Drivechain determined that the risk was not significant, Model Es were directed to return to a service centre within 90 days. -
No Batteries or Chillers Produced From Aug 2nd 2017
[Para 29, Statement of Agreed Facts] Owing to the urgency of the recall, Nikola focused on providing batteries and chillers for replacement purposes. From 2 August 2017, no batteries or chillers were produced for use in new Model Es. -
1 Model E Reported: Chiller & Battery CLSs at 0
[Para 20, Statement of Agreed Facts]
A Model E reported an SL of zero and chiller and battery CSLs of zero. Drivechain dispatched a recovery vehicle to collect it. However, the recovery vehicle was unable to reach the Model E, which had failed while submerged 4 nautical miles off southern coast of WA.
Its occupants, a young family, had been submerged under 6 metres of sea water while watching blue whales feeding... a seasonal upwelling of cold water from the ocean floor. -
Edison sold 27 100 Model E's
[Para 3, Statement of Agreed Facts] Between launch and 5 September 2017, Edison sold 27,100 Model Es. 22,822 are on the road, and water, today. -
Model E Total Recall Within 10 Days, Production Halted
[Para 33, Statement of Agreed Facts] The Model E fire, being deemed to have resulted from the common chiller fault, automatically triggered an urgent total recall. Model Es were directed to return to service centres within 10 days. Production of new Model Es was placed on hold. -
ISSUE: Nikola Refuses to Supply Batteries & Chillers
This is issue for determination D -
The Model E Returned to Service Centre
[31] ...deep diagnostics revealed that when submerged in v cold water, air conditioning unit registered false ambient temperature readings. Air conditioner responded by pumping more refrigerant through refrigerant loop. Chiller stopped pumping yet refrigerant continued to circulate through its plates. Combination of low water temperature & refrigerant circulation caused batteries to lose voltage. When current was applied in service centre, batteries caught fire. The Model was destroyed. -
Nikola Wrote Letter to Edison
[35] [Affidavit of Ms Member, Exhibit AM-3: TB 21]. Nikola protested that all issues regarding chiller due to a fault in air conditioning unit. N asserted that terms of contract (3/3/16) require air conditioning supplier to bear costs of all replacement chillers/batteries ordered to date & should compensate N for reductions in chiller & battery CSLs caused by the fault. N states it will cease supply of replacement/new batteries/chillers until confirmation that Drivechain had been reprogrammed. -
Ms Benz (Edison) Emails Ms Member (Nikola)
Email in response to Ms Member's letter on behalf of Nikola, stating Nikola will place all battery & chiller orders on hold. The email was critical of Nikola's choice to do so. -
Edison Writes Reply Letter to Nikola
[Para 36, Statement of Agreed Facts] [Affidavit of Ms Benz, Exhibit KB-1: TB 26], Edison asserted that Drivechain reflected or otherwise constituted the contract and that its programming had accurately directed payments and attributed responsibility in accordance with the terms of the contract. -
Dr Charlie Babbage Statement
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Period: to
Driverchain Gives 331 Purchasers Notice
[Para 37] The notice informs the purchaser of its right to avoid the contract...
331 prospective purchasers were informed. 283 of the purchasers exercised their option to avoid their contracts with Edison. Given the bad press surrounding the 5 September 2017 failure, Edison anticipates that purchasers will continue to avoid their contracts with Edison, compounding the effect of sales figures already reduced 68% below the previous two quarters’ figures. -
Affidavit of Audrey Member Filed on Behalf of Claimant (Edison)