Hydrogen bull market ahead? Are Nel, Nikola and First Hydrogen shares ready for entry?

First Hydrogen: Potential for a year-end rally

Is there an exciting entry opportunity for First Hydrogen? If CEO Robert Campbell's remarks at the IIF virtual investor conference were anything to go by, it is. Demand for zero-emission vehicles is currently picking up strongly. Commercial vehicles, in particular, are being sought by more and more companies to reduce fleet emissions in the coming years. The Canadian company aims to provide a hydrogen fuel cell commercial vehicle. Since November 2022, several fleet operators, including RIVUS, have conducted extensive road tests in the UK. The results were all convincing - even compared to battery-powered models. The range exceeds 630 km, and refueling takes place within 5 minutes. Thus, the time is ripe for entering the mass market.

To boost sales, First Hydrogen invited around 20 UK fleet operators to a "Track Day" at the end of October. On a test track near Birmingham, everyone can witness the performance of First Hydrogen's light commercial vehicles (FCEVs). The potential customers present on-site have a combined fleet of over 250,000 vehicles. In addition to test drives and technical details, First Hydrogen will also provide information on what the transition to a zero-emission fleet might look like in concrete terms.

Steve Gill, CEO of First Hydrogen Automotive, said, "We are overwhelmed by the interest fleet operators have shown us regarding a trial of our vehicles. There is time pressure for fleets to meet their emissions targets. Our goal is to send participating fleet managers and operations specialists home with a clearer picture of the capabilities of First Hydrogen's hydrogen fuel cell vehicles, which can serve as a basis for their decision to purchase zero-emission fleet vehicles." It is possible that shareholders will enjoy positive newsflow on initial pre-orders before the end of the year. You can watch Robert Campbell's presentation at the IIF by clicking here.

Nel: The tension is rising

Shareholders at Nel have been waiting for new order announcements for quite some time. Apart from a "warmed-up" announcement about the planned factory in the US state of Michigan, the otherwise communicative Norwegians have been surprisingly quiet over the summer.

At best, they have concentrated on working off their order backlog and can report positive quarterly figures accordingly. The publication of the third-quarter report is scheduled for next Wednesday, October 25. In the second quarter, Nel was able to significantly reduce its loss, surprisingly. But the business model remains clearly loss-making. As a result, rumors persist that the hydrogen specialist will need a capital injection until it reaches break-even. The uncertainty regarding the extent of a capital increase has been weighing on the stock for months. It is, therefore, not surprising that the share has slipped below NOK 8, making it the lowest it has been since 2019.

Nikola: Milestone in North America

While First Hydrogen focuses on hydrogen fuel cell light commercial vehicles, Nikola aims to revolutionize the heavy truck market with emission-free models. The Company, plagued by scandals, claims to have reached a milestone. They recently celebrated the market launch at their factory in the US state of Arizona. "Today, we celebrate the official market launch of our state-of-the-art hydrogen fuel cell electric trucks in the North American market. This is a testament to our team's relentless 'Can Do' attitude and brings us one step closer to realizing our vision of sustainable and efficient transportation," said Steve Girsky, CEO of Nikola. Large-scale customer vehicle deliveries are expected to occur in the current fourth quarter.

Nikola and its dealers have received 223 non-binding orders from 23 customers to date. Well-known fleet operators such as J.B. Hunt, AJR Trucking, Biagi Bros. and TTSI are now on the customer list.

The sell-off in stocks related to the energy and mobility transition sectors is tempting for investors. However, they should proceed cautiously - for example, the market capitalization of Nel is still a sporty NOK 12.9 billion. A substantial capital increase would likely lead to further price declines, but it could help remove uncertainty from the market. With a market capitalization of CAD 95 million, First Hydrogen plays in a different stock market league, and operationally, it is not yet as far along as industry giant Nel. This presents opportunities. In recent months, the Canadians have demonstrated that their vehicles are market-ready. If the first orders are now also reported, the share price should have significant potential. Nikola showed that a stock price can multiply rapidly in a short period during the summer. But this was certainly too much of a good thing. Thus, the share has come back from USD 2.67 to around USD 1. Nonetheless, the Company is still not cheap and needs significantly more orders to support its valuation.