Nikola, First Hydrogen, Nel ASA - Upheavals create enormous potential

Nikola - The next attempt

One thing has to be said for the Phoenix-based manufacturer of hybrid trucks. Despite all the setbacks, Nikola is not giving up the fight for a glorious hydrogen future. After the management shake-up, with former General Motors Vice Chairman Stephen Girsky taking over as CEO in August last year, many analysts see considerable upside potential.

Baird analyst Ben Kallo recently initiated coverage with an "outperform" rating and a price target of USD 2. He believes the US company would benefit enormously from a growing market for zero-emission trucks. In addition, Nikola has finally found the right management to take a step towards commercialization.

Kallo believes that Nikola's design and software will give the Company an advantage over traditional diesel vehicles in the future. "We see potential catalysts for both the truck and energy businesses in the form of production improvements, customer and partnership announcements and the expansion of hydrogen infrastructure," the financial expert said in a CNBC interview.

Nevertheless, the current share price of USD 0.73 poses a risk of delisting, as the share price has remained below the USD 1 threshold for more than 30 days. This is the second delisting warning issued by Nasdaq in the last 8 months.

First Hydrogen - Revolutionary tests continue

The hydrogen specialist based in Vancouver, London and Montréal does not need to be restructured, nor does the top management team around CEO Balraj Mann, which includes specialists from the industry, need to be renewed. First Hydrogen is pursuing its 2021 goal of becoming the leading designer and manufacturer of long-range, zero-emission, hydrogen-powered vehicles in the UK, the EU and North America.

The first test drives with the light commercial vehicles developed in collaboration with industry leaders AVL Powertrain and Ballard Power exceeded expectations. The prototype achieved a record range of 630 km on a single tank. Comparable light commercial vehicles with electric drive achieved just 240 km. Further top values were also achieved in the extremely low average consumption of 1.58 kg of hydrogen per 100 km, even at consistently high speeds.

With the gas network operator Wales & West Utilities, which operates 1,300 fleet vehicles and supplies more than 7.5 million customers with gas, the hydrogen-powered light commercial vehicles will be tested under real road conditions in Wales and the South West of England.

The new test run, which will last at least four weeks, will be a first. Until now, First Hydrogen's test runs have taken place near existing hydrogen filling stations. In the following test, areas lacking refuelling infrastructure will be approached, whereby the mobile refuelling system from Hyppo Hydrogen Solutions and the green H2 fuel from Protium Green Solutions will be used. This will allow Wales & West Utilities to refuel the test vehicle near the depot in Swansea without having to visit a public filling station.

The First Hydrogen share has escaped the negative stock market sentiment for hydrogen and fuel cell shares in recent months and is forming a stable floor in the CAD 1.60 range. If the positive news flow continues, the stock should move further away from its lows from 2023.

Nel Asa - Realignment causes share price to jump

As described above, the new goals set by Nikola's management are on track. This also includes the restructuring of the customer relationship with the Norwegian hydrogen specialist Nel Asa, which has also been facing a falling share price for months.

Both companies recently decided to terminate their previous supply agreement, which included components for a fuel cell system and hydrogen filling stations in addition to electrolyser equipment. Instead, they are focusing on a new agreement to supply 110 alkaline stacks and the corresponding balance-of-stack equipment. As part of this realignment, Nikola will pay Nel ASA approximately USD 9 million in compensation, as announced by Nel ASA.

Included in this strategic realignment is Fortescue's acquisition of the Phoenix Hydrogen Hub from Nikola, which involves the installation of 80 MW of electrolyser equipment previously supplied by Nel to Nikola. For the update of warranties and guarantees, as well as adjustments in the scope of delivery, Nel ASA will receive approximately USD 11 million from Fortescue.

Håkon Volldal, President and CEO of Nel ASA, emphasized his satisfaction with the new agreement with Nikola, which now better reflects the strategic direction. Nel is also pleased with the cooperation with Fortescue on the Phoenix Hydrogen Hub project, as Fortescue is a committed and reliable partner. In the wake of the announcement, the Norwegian share recovered from its lows of EUR 0.46 to EUR 0.58. However, this was followed by another sell-off towards USD 0.50. The stock is still far from experiencing a brightening of the chart pattern.

Nikola is realigning itself, enabling analysts to identify considerable upside potential. This also includes the rewriting of the cooperation with Nel ASA, which was positively received by the stock market. Meanwhile, First Hydrogen is testing a revolution using a mobile refuelling system with another major partner.