December 10th, 2021 | 13:14 CET
BYD, dynaCERT, Nikola - Traffic of the future must protect the environment
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
BYD - Capital increases put pressure on the stock
BYD is a group that makes cars, batteries, photovoltaics and cell phone components. It still produces internal combustion vehicles, but most of the vehicles it ships are hybrid or electric. In addition, the Company also has electric buses coming off the assembly line, which have a range of about 400km. This range is thanks to the Company's proprietary Blade batteries, which are considered the leader in the market. Rumors persist that Tesla wants to install batteries from BYD, not without reason.
In November, another significant order from Spain for 25 e-buses was announced. Buses were also ordered from Portugal in the first half of the year. The delivery figures for November were also impressive, with a total of 91,829 electric vehicles sold. This month was not the only one to show strong growth; for the year as a whole, sales more than tripled compared with the previous year. Up to and including November, 509,838 electric vehicles were sold.
This enormous growth requires capital, so the Group carried out two capital increases in November. In total, a good EUR 3.2 billion in capital was raised. As a result, the stake held by existing shareholders was diluted, which could be why the share has fallen since November 23. It is striking that the share survived the Friday crash on December 3 surprisingly well. Other Chinese stocks suffered considerably more. The share remains in an uptrend as long as the support at EUR 29.87 is not broken.
dynaCERT - The next step on the way to CO2 certificates
The alternative to electromobility and hydrogen is called dynaCERT. The Canadian Company has developed the HydraGEN technology, enabling large diesel vehicles to produce fewer emissions. In addition, fuel consumption is reduced, and the engine has a longer life due to optimized combustion. This optimization is achieved by injecting water and oxygen produced by an electrolysis unit. It could quickly reduce environmental impact, as the technology can be retrofitted in many vehicles.
The system is controlled by the Company's proprietary HydraLytica software, which will play an important role in the future. The Company is working with Verra to ensure that users of the HydraGEN technology receive CO2 certificates. HydraLytica measures and analyzes consumption and can indicate how much carbon dioxide has been saved. Companies can use it to offset other CO2 emissions or sell the certificates. On December 8, the Company announced an update to the certification process. Independent auditors are now verifying the technology to ensure that it meets the standards of the Verified Carbon Program (VCS).
As a result, the Company is one step further on the road to CO2 certificates. Progress is also being made in converting vehicles in the mining industry, according to H2 Tek, a distributor of dynaCERT. The technology is being tested in 6 countries for six months. Already on November 1, there was more good news. Sofina Foods Inc. continues to equip its vehicle fleet with HydraGEN technology. Initially, the system was installed in 4 vehicles, but now 16 more units are to be retrofitted. The share had risen from CAD 0.225 to CAD 0.44 after the news was announced. Currently, the share is trading at CAD 0.24. If the inclusion in the VCS program succeeds, the share has multiplication potential.
Nikola - Is the turnaround coming?
Nikola Corporation develops and manufactures zero-emission battery and hydrogen-electric vehicles divided into two business units. The Truck division develops and markets battery electric vehicles (BEVs) and hydrogen-powered fuel cell electric vehicles (FCEVs). In the Energy business unit, the Company is building a network of hydrogen refueling stations and charging stations for BEV customers. The Company was launched with big promises by former CEO Trevor Milton but failed to meet expectations.
Milton is on trial in New York, accused of deceiving investors. The Company wants to put this chapter behind it and will probably only pay a fine in the low three-digit million range. The Company is focusing on the delivery of the first BEVs and hopes to regain investors' trust. After delivery, there will be the first sales, and so the Company hopes to gain the time to place the FCEV vehicles on the market. Since the production capacity is to be expanded simultaneously, the capital cover could be a bit thin.
As an investor, you need strong nerves with the Nikola share. At one point in June 2020, the stock was at a high of USD 93.99. From there, it went down to USD 9.02. Since August 16 of this year, the share has run sideways between USD 9.02 and 15.56. Currently, the share is trading at USD 10.13. If the Company succeeds in achieving a turnaround, higher prices are conceivable. As long as the share does not fall below USD 9.02 on a closing price basis, a test of USD 15.56 is possible. However, the value is more suitable for gamblers.
All three companies want to contribute to sustainability. BYD is currently the pioneer here because 90% of the vehicles sold have an emission-free electric drive. dynaCERT has specialized in large diesel vehicles and offers emission reduction with its technology. A jump in the share price beckons if the CO2 certificates can be issued. Nikola must now prove that they can deliver on their promises. The approach is good, but the history makes the stock a hot potato.
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