April 10th, 2024 | 07:30 CEST
Nel ASA, First Hydrogen, Nikola - Hydrogen on the rise
With the development towards a clean and efficient logistics industry, hydrogen is gaining importance as a forward-looking energy carrier. Continuous innovations in fuel cell technology and storage systems are making it increasingly competitive. This technological progress, coupled with government incentives to expand the necessary infrastructure, is paving the way for widespread adaptation in the logistics sector. Pilot projects are already validating the practical suitability and paving the way for more extensive implementation in the logistics sector. Recently, there have been positive signals from the three hydrogen companies we are looking at today.
time to read: 5 minutes
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Author:
Armin Schulz
ISIN:
NEL ASA NK-_20 | NO0010081235 , First Hydrogen Corp. | CA32057N1042 , NIKOLA CORP. | US6541101050
Table of contents:
"[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE
Author
Armin Schulz
Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.
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Nel ASA - Quarterly figures ahead
The Norwegian company Nel ASA is looking westwards: with plans to expand its production capacities in the United States, Nel wants to benefit from the wave of green investment there. Nel has received a funding commitment of around USD 100 million from the US Department of Energy and the state of Michigan. In addition, USD 41 million in tax credits have been approved under the Qualifying Advanced Energy Project Credit (48C) program. CEO Håkon Volldal sees this as a crucial basis for the construction of a factory that will also drive forward the energy transition by creating green industrial jobs.
The focus is on AEM electrolysis technologies and sustainable recycling methods for the hydrogen industry, which are both areas in which Nel has the potential to be at the forefront. The partnership with General Motors, which has been in place since November 2022, could bring further benefits for both companies and increase competitiveness in the development of renewable hydrogen sources. Both parties are working on PEM stacks, specifically pressure-resistant alkaline stacks. They are intended to usher in the new generation of electrolysers.
The financial support has given the Company some breathing space, but now it is time to convert these funds into viable market structures. With one of the world's largest electrolysis plants, Nel plans to increase annual production to 4 gigawatts. The positive analyst commentary from RBC, which ascribes potential for a doubling of Nel's shares, has led to a price correction and taken the share above the resistance level of NOK 5.58. This is a positive development. The share is currently trading at NOK 6.022. The figures for the first quarter, which are to be presented on April 17, will determine the future path.
First Hydrogen - Hydrogen ecosystem successfully tested
First Hydrogen, the green energy solutions company with operations in Canada and the UK, has caused a stir by developing hydrogen-powered fuel cell vehicles (FCEVs) that can travel over 630 km on a single tank. This technological innovation marks a significant step in the green transformation of the logistics sector, with trials currently taking place in the UK. In parallel, the Company is engaged in an ambitious project involving the construction of a 35-megawatt hydrogen production facility and a vehicle assembly plant in Shawinigan, Quebec.
In partnership with renowned organizations such as Wales & West Utilities (WWU), the practical benefits of zero-emission vehicles are being put through their paces. The month-long test covered more than 2,000 km using a mobile refueling system. In collaboration with Protium Green Solutions and Hyppo Hydrogen Solutions, a hydrogen ecosystem was created that can be used at locations without suitable infrastructure. WWU's drivers praised the benefits of the FCEV, such as its ability for quick refueling cycles and long range - even in the harsh conditions of the UK winter, where battery electric vehicles (BEVs) may be pushed to their limits.
The test runs are to be extended from the UK to Canada. The Company has received tremendous interest from fleet operators in Quebec, as many of the key metrics of hydrogen-powered vehicles are better than those of electric vehicles. The predicted development of the global hydrogen vehicle market, which is expected to achieve significant growth rates in the coming years, plays into the hands of First Hydrogen with its niche of light commercial vehicles. The share has been dragged down by the downward spiral and the problems of the major players in the hydrogen sector and is currently trading at CAD 1.05, well below the high of CAD 4.99 from 2023. Those who want to learn more should participate in the 11th International Investment Forum on April 17, where the Company will be presenting live and answering questions.
Nikola - Surprises analysts
After the last quarterly figures, the share took another dive and marked a new low at USD 0.582. In Q4 2023, the Company reported a negative gross margin of -331% and an operating cash flow of USD -118 million. Although management forecasts higher hydrogen fuel cell truck deliveries in 2024, this figure pales in comparison to the growth rates of other players. Nevertheless, the share price subsequently climbed by almost 100%. What are the reasons? Indeed, there was some news in March.
To start with, the new CFO, Thomas Okray, was announced. The Company produced 43 hydrogen fuel cell electric trucks in Q1 and sold 40 to US customers. At the same time, Nikola began the return process for battery electric trucks following the safety update. This was above analysts' expectations. Additional revenue is expected to be generated in the coming quarters with the introduction of HYLA hydrogen refueling solutions. On March 27, Alberta's first commercial hydrogen refueling station opened in the Edmonton area. Six days earlier, the first HYLA refueling station was inaugurated in Southern California.
The next quarterly figures, which are to be presented on May 7, will reveal whether the Company can really turn things around. It is crucial that the Company stops burning cash. To achieve this, however, the margin must be significantly improved. The rise could have resulted from a short squeeze, as the better figures could have caught some short sellers on the wrong foot. The short ratio recently stood at around 19%. After reaching a high of USD 1.15, the share has consolidated and currently stands at USD 0.985.
The hydrogen sector is sending out positive signals. These should be confirmed in the coming months to achieve a sustainable turnaround. Nel ASA is receiving a lot of support in the US, and its partnership with General Motors could finally bear fruit. First Hydrogen is receiving a lot of praise from its customers who are testing the demo vehicles. In the meantime, a hydrogen ecosystem has been created with partners, enabling all customers to switch to hydrogen. Nikola has solved its problems with electric trucks and has recently sold more hydrogen-powered trucks than expected. The mood in the sector is slowly brightening.
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