Hand holding hydrogen pump.
Enlarge / A Nel/Nikola refueling pump is proven in a 2019 publicity picture.

Nikola Motor Firm

Shares of hydrogen truck startup Nikola plunged 26 % on Wednesday after The Wall Road Journal reported that the corporate was struggling to search out companions to construct a deliberate community of hydrogen fueling stations. Nikola’s inventory closed at $21.15 on Wednesday, a decline of 57 % from the $50 peak reached on September 8, the day Nikola announced that GM would design and manufacture its Badger pickup truck.

Shortly after the GM deal was introduced, the short-selling agency Hindenburg Analysis revealed that Nikola founder Trevor Milton wasn’t telling the reality at a 2016 occasion when he claimed that the Nikola One truck on the stage “totally capabilities.” Nikola now concedes that the truck by no means labored and {that a} promotional video of the truck was made by rolling it down a hill.

Nikola argued that this was previous information as a result of Nikola is not advertising the Nikola One and has a working prototype of the Nikola Two. However the revelations threw the corporate into chaos and forced Milton to resign on Sunday.

Why Nikola wants hydrogen fueling stations

In response to The Wall Road Journal, the Hindenburg revelations have sophisticated Nikola’s seek for assist with constructing a planned network of hydrogen fueling stations. The corporate already has a deal in place to make use of Nel electrolyzers to generate hydrogen and had been in talks with a number of corporations—together with BP and different power producers, “industrial gasoline corporations,” and “truck cease operators”—to deal with the logistical particulars and assist construct and run the stations. In response to the Journal, “Nikola executives felt they had been making progress” towards signing a deal, however “the conclusion of this deal was placed on maintain” after the Hindenburg report. The Journal acknowledges that “a deal might nonetheless come collectively.”

These fueling stations are an important a part of Nikola’s enterprise technique. As a substitute of promoting semi vehicles outright, Nikola’s plan is to lease them at a set per-mile fee that covers gasoline and upkeep. That reduces the chance clients should tackle an unproven know-how. However the plan will not work if Nikola does not have some gasoline stations operational by the point its hydrogen-powered semis start rolling off the meeting line—one thing that is presently slated to occur in 2023.

Nikola has lengthy appeared to associate with corporations that have already got the know-how Nikola wants. Nikola took this method to an excessive within the GM deal; GM is meant to each design and manufacture Nikola’s Badger vehicles, which shall be primarily based on GM’s battery and hydrogen cell applied sciences. Nikola has made comparable offers with different corporations—together with Iveco and Bosch—to assist design or construct its semi vehicles.

Briefly, a giant a part of Nikola’s technique till now has been to unravel issues by throwing cash at them. Till not too long ago, the hype surrounding Nikola made it straightforward to boost money.

However the firm could now be getting into an period of elevated investor skepticism. That would power Nikola to tighten its belt and do extra with much less. If that occurs, we’ll discover out if Nikola can accomplish its formidable targets with out relying so closely on well-compensated companions.


Please enter your comment!
Please enter your name here