June 29th, 2022 | 11:44 CEST
First Hydrogen, Daimler Truck, Mercedes-Benz - Will the EU Parliament's exit from combustion engines provide the next boost?
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
First Hydrogen: Profiteer
First Hydrogen is likely to be one of the immediate beneficiaries of a ban on internal combustion engines in the EU, as the Canadians specialize in building light commercial vehicles (LCVs) with fuel cell technology.
The Company is currently conducting a pilot test of two MAN eTGE platform trucks equipped with fuel cells from Ballard Power and converted by AVL Powertrain in the UK.
From September, these are to receive road approval and start their first practical tests with fleet operators. The vehicles are of interest to these operators because conversion to fuel cell technology can increase the range of the vehicles from the original 115 kilometers to over 500 kilometers while maintaining the same top speed and payload.
In addition, refueling the vehicles takes just five minutes. Compared with charging the battery-powered transporters for hours on end, this means that the operating time of the vehicles can be significantly increased over the course of the day, which greatly improves the economic efficiency of the vehicles.
However, an appropriate refueling infrastructure must also be available. First Hydrogen has therefore announced its intention to build up to four of its own production sites with connected refueling stations and an initial production capacity of 80 to 160 MW through its subsidiary NetZeroH2. The necessary refueling technology is being developed together with FEV, experts in automotive technology based in Aachen, Germany.
The Canadians' fiercest competitor is likely to be the joint venture between Renault's commercial vehicle division and the other major fuel cell specialist Plug Power, which was able to present its first prototypes as early as the end of 2021. Currently, First Hydrogen's share price seems to have stabilized at around CAD 1.60. A successful road approval in the fall is expected to provide a tailwind.
Daimler Truck - Hydrogen truck with a range of over 1,000 kilometers generates enthusiasm
After the strong figures presented by Daimler Truck at its first Annual General Meeting just over a week ago failed to trigger storms of enthusiasm on the stock markets, the turnaround in the share price is now coming with a delay. The reason is the presentation of a new hydrogen truck based on fuel cell technology, which takes the vehicle over 1,000 kilometers - without stopping to refuel.
The Company relies on refueling with liquefied hydrogen. For this purpose, the hydrogen is cooled down to -253 °C during refueling. In terms of volume, liquefied hydrogen offers a much higher energy density, which makes the trucks' extreme range possible in the first place.
In addition to vehicle development, the focus is also on the further development of the refueling system. The Swabians are relying on cooperation with gas specialist Linde. The system, known as sLH2 technology ("subcooled liquid hydrogen"), is to be developed as an open standard to enable other manufacturers to use it and ensure widespread use.
The share price recently reacted positively. Analysts see further upside potential. JPMorgan recently upgraded the stock to "overweight" and RBC to "outperform". The consensus of seven analysts currently puts the price target at EUR 36.86 - a price potential of around 40%.
Mercedes-Benz Group sets new electric range record
The luxury carmaker Mercedes-Benz is not relying on hydrogen technology but batteries. The Group set a new range record a few days ago during a drive from Stuttgart to Silverstone in England. The Vision EQXX covered 1,200 kilometers on just one battery charge. That corresponds to a consumption of just 8.3 kilowatt-hours per 100 kilometers, undercutting the previous record by another 0.4 kilowatt-hours. One kilowatt-hour is the equivalent of around 0.1 liters of gasoline.
The goal was achieved through aerodynamic changes to the prototype based on the production of the EQS sedan and weight savings. According to the Company, the top speed during the drive was around 140 km/h, while the average speed was about 83 km/h. The Company said that during half of the driving time, the air conditioning was also switched on to keep the interior comfortable from the warm outdoor summer temperatures.
Mercedes-Benz's focus on electromobility will likely make it a winner under the new EU directive. By focusing on the premium segment, the automaker should also react less sensitively to a drop in demand from countries whose path to electromobility currently still seems very long. Analysts are therefore also clearly optimistic about the share: the consensus of 24 analysts attests the share a price potential of over 50%.
The EU's phasing out of internal combustion engines is consistent. The future of mobility is electric - whether hydrogen-based or using battery technology. Companies with a consistent electric strategy will be among the winners. Given the low valuation of around CAD 106 million and the potential arising from the technology, the shares of First Hydrogen appear particularly promising.
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