21. July 2021 | 11:15 CET
NIO, Pure Extraction, Nikola - Fighting for pole position
Whether by car, train, ship or plane - when people are on the move, they almost always cause emissions. The transport of goods around the world also places a heavy burden on the air and climate. As a result of the energy transition and decarbonization, automakers worldwide are turning to battery-powered electric cars. However, this is unsuitable for transport due to the short-range and long charging time. Here, the advantage currently lies very clearly with fuel cell technology.
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ISIN: NIO INC.A S.ADR DL-_00025 | US62914V1061 , PURE EXTRACTION CORP. | CA74622J1012 , NIKOLA CORP. | US6541101050
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Transport logistics on the move
The battle for the next generation of trucks is in full swing. Many established car manufacturers are researching and developing their own fuel cell trucks. Nikola, Daimler with Volvo, Mercedes, Hyundai, MAN and Toyota want to have some of their models ready by next year and establish the trucks on the market. In addition, research is being carried out on tank systems intended to reduce the high costs of hydrogen. So far, systems using hydrogen have been too cost-intensive, but these are expected to drop by up to 50% in the next few years by implementing wind or solar energy. This would eliminate the disadvantage compared to diesel-powered trucks.
New player with big goals
The booming logistics market is the target of the hydrogen company First Hydrogen, which is still listed in Germany under the old name Pure Extraction. According to the Company, which is staffed with recognized industry specialists, the transport industry is under massive pressure to meet the specified emissions targets. With a "best of" strategy, First Hydrogen plans to produce within a year a prototype zero-emission delivery truck based on hydrogen fuel cell technology that will solve all the drawbacks of battery technology. These being: short-range, long charge cycles and limited storage space due to the size of the battery packs.
In addition to the short development time, the "First Hydrogen Utility Van" development is also expected to be more cost-effective. Company management estimates the cost to be around EUR 1.33 million. A design and integration strategy and the use of a proven chassis will give First Hydrogen huge production advantages. In addition, two significant collaborations were signed last month. Ballard Power, a global provider of innovative clean energy with a hydrogen fuel cell fleet, was secured for the technology. For design, a definitive agreement was reached with AVL Powertrain UK, the world's largest independent automotive development, simulation and testing Company. AVL is to be responsible for the development of vehicle components and the control software.
According to industry experts, First Hydrogen is in a total growth market, with fuel cell market growth rates of around 20% per year. The Company is currently valued at around EUR 90 million on the stock exchange.
The fact that development is not without obstacles is something the US developer of battery and fuel cell trucks, Nikola, can tell you a thing or two about. After allegations of fraud last year and a crash in the stock from just under USD 94 to a low of USD 9.37, new management is trying to regain investor confidence and shine operationally. Now, an expansion of the distribution and service network has been announced.
Cooperation with five new independent dealers adds 51 new locations in Texas, Arizona, California, Colorado, New Mexico, Florida, Delaware, Virginia and Maryland. In addition, a cooperative agreement was signed with the RIG360 Service Network, which has more than 65 locations in the Southeastern, Midwestern and Northeastern United States.
After a strong price recovery of almost 100% to USD 19.50, the share failed at the marked resistance point and again turned south. In volatile trading, Nikola is currently testing support at USD 13.50. Nikola remains one of the most attractive players in the fuel cell truck market despite the mismanagement by the old management. However, the stock is only suitable for speculative investors.
NIO takes care
The chip shortage did not leave the Chinese electric car manufacturer NIO unscathed. The Company had to stop its production back in March due to the lack of semiconductors and close its plant in Hefei for a short time. The subsidiary NIO Ltd. is taking a stake in the Shanghai-listed AI chip Company Cambricon, albeit with a small tranche of just 2%, with an equivalent value of around EUR 525,000. The NIO share is currently in a correction phase. A break of the support at USD 42.50 should result in a larger sell-off. A sustained breakout above the USD 45 mark would make the chart bullish.
In the passenger car sector, the current trend is clearly toward battery-powered electric vehicles. In contrast, fuel cell technology has enormous advantages for the truck sector, in addition to its shorter charging time and longer range. Nikola and First Hydrogen have the opportunity to participate in the success of the industry in the long term. However, both companies are still in the development phase. Investment is therefore associated with risks.