November 18th, 2021 | 11:39 CET
Trucks and hydrogen as a billion-dollar business: Daimler, Clean Logistics, Nikola
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"[...] We are committed to stay as the number one Canadian and global leader in the Hydrogen-On-Demand diesel technology [...]" Jim Payne, CEO, dynaCERT Inc.
Daimler and the trucks: This story is not over yet
Daimler is a group with various divisions. In addition to the popular passenger cars, which are now also available electrically in all model series, Daimler also has a truck division. The Trucks & Buses division currently accounts for just over 20% of the Group's total revenue and is soon to be listed separately on the stock exchange. The Swabians argue that Daimler Trucks should receive a higher valuation on its own than when integrated into the Group. Examples from the recent past show that such an approach can certainly be worthwhile; for instance, the spin-offs of Siemens Energy and Siemens Healthineers were highly successful. But what does Daimler Trucks have to offer?
The operating margin at Trucks & Buses was recently 6%, in contrast to a whopping 14.3% at Passenger Cars. Daimler is planning to increase the margin for its commercial vehicles to 7% in the foreseeable future. But is that enough for success? Under the circumstances, the spin-off does not seem to be a foregone conclusion. Although Daimler is well-positioned in trucks and has a real blockbuster in the Actros, the truck division faces upheaval. The hydrogen drive must come; otherwise, it will become increasingly difficult to achieve the climate targets. Daimler plans to bring fuel cell trucks to market in larger numbers from the second half of the decade. However, the Company has not yet completely abandoned conventional drive systems and batteries, and is planning a mix of technologies. The extent to which the mobility turnaround in commercial vehicles can succeed without a clear roadmap and a commitment to a key technology remains an open question. Daimler Trucks must become more profitable and make more of its current good market position. Being a first-mover in hydrogen would be a good thing for the Swabians.
Clean Logistics already puts hydrogen on the road
One such first mover is the German Company Clean Logistics. The northern Germans converted an existing bus with an internal combustion engine to a hydrogen vehicle in the summer less than a year after receiving the order. Clean Logistics is doing the same with trucks, focusing on the most common models on the European market. Clean Logistics' plan: trucks that were previously gradually scrapped on the secondary market four years after purchase will be converted to hydrogen by the Company, giving them a new life cycle of 10 years. The end result will be a vehicle that is CO2-neutral, requires less maintenance and still offers drivers the same "look and feel" as classic trucks.
Clean Logistics differentiates itself from large corporations, such as Daimler, through a modular approach and flexible processes. While the big players plan new models and model series long in advance and sometimes take a somewhat woodcut approach, at Clean Logistics, everything is in a state of flux. New components come onto the market in China that promise advantages? Clean Logistics imports them and tries them out! If a new approach promises success, it quickly becomes the standard. CEO Dirk Graszt recently revealed in an interview how the Company is proceeding in concrete terms and why time is pressing in the case of hydrogen drives: "However, to achieve the climate targets, which call for us to save 48% of CO2 in the area of mobility by 2030, we would have to put between 220,000 and 250,000 vehicles over 7.5 tons on the road without emissions in freight transport. Currently, only 10 such vehicles are registered in Germany," Graszt summarized the situation at the time. Clean Logistics' stock, like the business, is in its infancy. However, the ideas behind Clean Logistics are convincing. It also cannot be ruled out that a major truck supplier will subsequently have to correct its screwed-up hydrogen strategy through acquisitions.
Nikola: What remains after the scandal?
One company that was considered a takeover candidate for a long time was Nikola. But then came the hydrogen scandal: Nikola had cheated in an advertising video and let its prototypes roll off mountains. In the meantime, the Company's ex-chief has been indicted and is haggling over where to bring the charges. The Company itself announced that it expects only a low three-digit million fine for its misconduct. So all is well at the self-proclaimed hydrogen truck pioneer? The share price has been under heavy pressure for more than a year. Although there are always small rays of hope, such countermovements are part of any downward trend. The Company has gambled away trust.
To bet on hydrogen trucks, investors would be better off betting on companies that also come from the logistics sector. Daimler is the top dog and should have market share in the end, even if the start into the hydrogen era is rather jerky. The Clean Logistics team also comes from the logistics sector. Here, too, they are not building castles in the air but are converting the most popular models in the industry to be climate-neutral. The experience gained in this way should soon be of value in its own right - climate change is in full swing. Practical solutions are needed today rather than tomorrow.
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