December 17th, 2021 | 12:50 CET
Nikola, First Hydrogen, Plug Power - Will the transport industry rely on hydrogen?
Table of contents:
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Nikola - Former CEO sells millions of shares
Nikola Corporation has not yet decided on a solution. Therefore, the Company develops and manufactures zero-emission battery and hydrogen-electric vehicles. However, only the electric trucks are currently ready for delivery. The Company was hyped initially, but it has only gone downhill since then - thanks mainly to the full-bodied promises of the former CEO Milton. Among other things, he claimed that he had reduced hydrogen production costs by a whopping 80%. He has not yet proved this and is now on trial in New York.
The accusation is that investors were misled. According to SEC investigations, the Company must pay a fine in the low three-digit million range. The Company, however, wants to get the money back from Milton. He should have money because he sold around 15 million shares in November alone. Nikola is trying to build its business and deliver on its promises despite the disruptive fire. It plans to deliver up to 25 electric trucks by the end of 2021. Strategic cooperation agreements have been signed with TC Energy and OPAL Fuels with the aim of optimizing the hydrogen refueling system. At the same time, production capacity is to be expanded to get the hydrogen-powered truck on the road after all.
All this costs money, and the Company is slowly running out of it. Under the current conditions, it will not be easy to raise fresh capital. So the success of the first trucks is hugely vital for the Company. The stock may have formed a triple bottom at USD 9.02. If this mark can be held, a test of USD 15.56 is conceivable. For this, however, the Company needs positive news. The share is currently only interesting for hard-core gamblers.
First Hydrogen - First demo vehicle completed
First Hydrogen, which operated under the name Pure Extraction until the beginning of October, has recognized the signs of the times and has set itself the goal of becoming the leading manufacturer of zero-emission hydrogen-powered commercial vehicles in Europe and North America. To achieve this goal quickly and without detours, the Company has brought well-known partners on board. The hydrogen fuel cell technology comes from Ballard Power, which already has over 1,300 hydrogen-powered buses on the road. AVL Powertrain has been enlisted for the design. AVL develops, simulates and tests in the automotive industry and operates three fuel cell technology centers.
On August 9, the TSX Venture Exchange approved the collaboration between the three parties. On October 18, First Hydrogen announced plans to build two hydrogen fuel cell-powered commercial vehicles for the UK market for demonstration purposes. Construction of the first vehicle was completed as early as October 21. The basis was a MAN eTGE, which Ballard converted to a hydrogen drive. The vehicle has a range of more than 500 km. This approach significantly reduces the development time and also saves costs.
First Hydrogen UK Chairman Nicholas Wrigley's speech at a roundtable at the UN Climate Change Conference COP26 in Glasgow in November shows how well management is wired. There, ambitious targets were set for reducing emissions. The Company can play an interesting role in this if it is successful. Since November, the stock has traded in a narrow range between CAD 1.59 and CAD 1.85. The high for the year was CAD 2.41. The current price is CAD 1.60. As a result, the market capitalization is CAD 73.6 million, which compares favorably with other hydrogen companies.
Plug Power - Many new cooperations
Plug Power is probably the biggest player in the hydrogen sector. The Company's goal is to cover the entire value chain. If there are gaps, they are plugged through acquisitions or partnerships. At the same time, the Company is winning more and more orders worldwide. However, it has been active primarily in the domestic market recently. On December 14, a long-term supply and logistics agreement was signed with North America's leading natural gas transporter to further expand the hydrogen infrastructure. The Company wants to be prepared when hydrogen becomes attractively priced.
On December 15, the group announced that it will work with Edison Motors on the mass production of hydrogen-powered buses. The Koreans will develop a prototype with Plug Power's fuel cell system and then move into mass production. Everything should be ready for mass production in the first half of 2023. If the collaboration is successful, trucks, drones and ships are expected to follow in the future. The acquisition of Frames Group also took place in December, giving the Company the know-how in the field of electrolyzers.
From October 6 to November 22, the stock had a real rally. The stock rose from USD 24.60 to USD 46.50. Since then, the stock has been consolidating, closing the gap from October 13, bouncing from there and currently trading at USD 31.36. On the way down, the stock has formed a small downtrend even if the overriding trend is still long. As an interested investor, one should wait for a break of the downtrend line. The average price target of analysts is around USD 49.
A mix of different approaches is needed to achieve the set climate targets. One of these is certainly hydrogen, and the prerequisite for success is to reduce the price of hydrogen significantly. Nikola is currently not yet able to deliver a hydrogen-powered truck. First Hydrogen, together with its strong partners, has built a first demo commercial vehicle. You can still get in on the early stages here. Plug Power is the top dog in the hydrogen market. After the setback, you can look for an entry if you believe in hydrogen.
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