Nikola – Ahead of the pack in emissions-free trucks


April 8, 2023

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Nikola – Ahead of the pack in emissions-free trucks

On January 25th of this year, the Analyst Day took place at company headquarters in Phoenix and was – as I saw it a big success for Nikola. Via streaming, I was able to get an impression of how more than 300 representatives from shipping companies, suppliers and energy companies as well as from politics and the media came together to inform themselves about the plans of Nikola directly on site.

There, it was said that HYLA is to become the new core brand for hydrogen at Nikola. This name combines the first syllable of hydrogen with the last syllable of Nikola. CEO and president Michael Lohscheller stated: “Nikola is the only company that has succeeded in unifying a revolutionary new product – the hydrogen fuel cell truck – and the entire supply chain for the H2 energy infrastructure under one roof.”


Michael Lohscheller at IAA Transportation 2022


On February 23, 2023, the figures for the fourth quarter of 2022 along with the entire year of 2022 were published: The turnover for Q4 2022 reached only 6.5 million USD (expectation: 32 million USD). The total loss for year 2022 was 784.2 million USD (includes 255.4 million USD stock-based compensation).

The explanation for the low turnover in this quarter of 2022 is that Nikola has delivered only 20 battery-electric trucks. The majority of the vehicles produced were retained as inventory – for good reason: The Tre BEV was so optimized that the costs were able to be reduced by over 100,000 USD per truck. A tremendous savings considering that the starting version of this truck cost a good 380,000 USD and a subsidy amount of up to 190,000 USD per vehicle is possible.

“People always think we’re a truck company, but maybe we’re actually an energy company with a truck division. The infrastructure is probably more important than the truck itself. That’s why we try to think the other way about hydrogen.”

Michael Lohscheller, Nikola CEO

The savings success was based on a combination of the optimization of energy management, the software, the batteries, the application of materials and the low personnel requirement through automation. Viewed so, the lower than expected turnover also means less loss and a more favorable price for the buyer of the BEV. It’s clear that money will only be made here with scaling. Much more important, though, is the outlook, as the Tre FCEVs (H2 trucks) are coming to market in the second half of the year.

The loss for year 2022 amounted to 784.2 million USD. Included in this is 255.4 million USD of stock-based compensation. In addition to 323 million USD in cash and equivalents (freely available and restricted), other equity stood ready at the end of 2022: namely, 232.2 million USD from the running ATM program, another 75 million USD from a convertible bond and 312.5 million USD from the share-based credit line of VC Tummin. So altogether 942.7 million USD in liquid assets stood available for 2023, which is sufficient to finance the whole year through (self-assessment by the company). Additionally, subsidy payments for the Tre FCEV and BEV units to be delivered are expected.

For the entire year 2023, delivery of 250 to 350 Tre BEVs and 125 to 150 Tre FCEVs is expected, which corresponds to a turnover for the year of 140 to 200 million USD. In 2024, turnover could already exceed the 1 billion USD mark, as demand for emissions-free vehicles is rising and, little by little, Nikola can reap the fruits of its automated production line.

To address the chicken-and-egg problem, Nikola is itself producing hydrogen – along with partners – and building up the necessary infrastructure. By 2025, a minimum of 60 hydrogen refueling stations of its own are to be established. In addition, Nikola has created a mobile hydrogen fueling station concept that can hold 960 kgH2. The tank filling time per truck is under 20 minutes.

Nikola in the medium and long term wants to earn money predominantly with hydrogen as a consumable, and do so with rising quantities and earnings potential. The IRA of the Biden administration can be a turbo for it, as green hydrogen is being subsidized with 3 USD per kg. Perhaps a similar program is also coming in Europe, where Nikola along with partner Iveco have taken E.ON on board to prepare hydrogen for the refueling of the trucks.

Nikola partner Iveco is also going into electrification

DSC_0161.jpg – s. Dropbox

Listed in CARB program since February

The hydrogen-powered trucks from Nikola have been allowed funding by CARB (California Air Resources Board) as part of its program HVIP (Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project). A result of this is a financial funding of 240,000 up to 288,000 USD per vehicle in this economically strongest state in the USA.

The US government is giving another 40,000 USD per truck on top of that via the IRA. (For battery-electric models, funding through CARB lies at 120,000 to 150,000 USD per unit, on top of the 40,000 USD subsidization via the IRA). Concurrently, the IRA provides for other subsidies that pertain to the production of hydrogen as well as the production facilities for the trucks (battery-electric and hydrogen-powered).

Through HYLA, Nikola has already created a future daily capacity of 300 metric tons of hydrogen per day. Nikola is positioning itself via various paths and production types, and is producing H2 supply security without depending on a single supplier. Without hydrogen as a consumable, the FC trucks cannot be sold – the chicken-and-egg problem is solved.

DOE credit of over 1.3 billion USD as game changer

This credit as part of the IRA would be perfect for Nikola. The company is virtually predestined to receive this support and to invest it in hydrogen infrastructure and production. Whether in the end it’s 1.3 billion USD, only part of that or all of it but in tranches over several years is inconsequential. Important is the psychological effect, since if Nikola has this money available, the total liquidity would be in a healthy state. The solvency of this startup would then experience a noticeable improvement. The refinancing of the loan could be done peu à peu through the issuing of shares over the years so that borrowed capital becomes own capital. But these are just my expectations for now – and only that.

LoI for 100 FC trucks from GP Joule

Nikola has recently signed a letter of intent with German all-rounder in renewable energies GP Joule to supply 100 hydrogen-powered vehicles. GP Joule operates wind and solar farms, is building its own network of hydrogen refueling stations and is set on its own H2 production. A perfect combination, is our summary. GP Joule had also signed an LoI with a basic agreement for 5,000 hydrogen-powered trucks with Clean Logistics – we reported – which can no longer be realized after the negative developments of the past weeks, as Clean Logistics needed to file for bankruptcy (see p. 6). There are only very few truck manufacturers now who can supply such vehicles. Nikola is a good choice here. These FC trucks designated for the European market will not be deliverable until 2024, however.

Partnership with Fortescue Future Industries

Fortescue Future Industries (FFI) as well, the company of Australian billionaire Forrest, will be working with Nikola in hydrogen production in the future. The two companies are planning a collaboration in hydrogen projects. Specifically the site in Buckeye in Phoenix, Arizona, where Nikola’s own hydrogen production is planned. Here it is even conceivable that FFI will have a 51 percent stake (Nikola 49 percent) while Nikola could get full rights over the hydrogen. Nikola has already invested over 16 million USD in the form of land purchases.

Plug Power, on the other hand, has ordered 75 hydrogen-powered trucks from Nikola. Furthermore, it’s been said that they want to work together in the supplying of hydrogen as well (Nikola as a customer of Plug). Plug is supplying the technology for hydrogen liquefaction. Nikola is therefore taking various complementary paths in order to make hydrogen available in the needed quantities and to not end up with any dependencies.

CTO Christian Appel at Mission Hydrogen

As part of the series of webinars at Mission Hydrogen, Christian Appel, Chief Technical Officer (CTO) of Nikola, has provided a lecture in which he presents the status and plans of the company. Appel worked in managerial roles at companies like Bosch. Nikola, according to his assessment, is perfectly positioned to play a major role in the decarbonization of heavy transport. After all, they have already invested a good 2 billion USD in production facilities and in the development of the company with now approximately 1,500 employees.

The hydrogen-powered trucks will be on the market in the second half of 2023. Test vehicles are already on the road and in daily use at customers like Walmart and Anheuser-Busch. As it appears, Nikola will be one of the first to offer an FC truck at the large series production level. Then, with 70 kg of hydrogen in the tank, distances of 500 miles (805 km) could be traversed.

Special safeguards

For the energy management in the hydrogen-powered trucks, Nikola is relying on AI, since the battery and fuel cell must be perfectly matched to each other throughout every road condition and power demand: At times, the hydrogen is to run the electromotor via the FC; at others, the electricity comes from the battery, which is then recharged sometime during the trip. An important influencing factor is whether the truck is on flat roads or hilly areas or in the mountains. Climate zones are taken into account as well.

When it comes to safety, Nikola does not rely only on government stipulations and industry standards but also on its own criteria, for example, for crash tests. The tanks not only have a special thermal protective coating but are equipped with a system of sensors like that for an airbag (crash detection system). Additionally, the hydrogen tanks are especially resistant to damage (for example during collisions) and can withstand high temperatures up to 1,000 °C, for example in a tunnel, for more than 30 minutes.

Safety software system

To further raise the safety, Nikola is counting on PlusDrive. This is an assistance system for the truck driver, who perfectly complements the personal software, expressed the truck manufacturer. The driver develops into a pilot sitting in his cockpit. It’s a lot more than just lane sensors. The system calculates driving distances, determines the speed – according to road conditions and traffic – and sensor technology helps prevent accidents. By using the various camera systems, the driver has everything in view, up to and including the use of radar. Even the condition of the hydrogen as well as the fuel level are continuously monitored. The driver is warned – whether about pedestrians, cyclists, other vehicles or road conditions. PlusDrive is considered a frontrunner of this technology for use in commercial vehicles, and Nikola is one of the first users. Implementation in their vehicles is to occur by the end of 2024.


In the second half of the year, the hydrogen-powered Tre FCEV Class 8 will go onto the market. Gamma versions for test purposes are already in test trials with customers. About this, Nikola says, “We believe we are the only commercial EV company to offer an integrated mobility solution consisting of truck and energy.” Nikola is benefitting from not only the subsidy for H2 in the amount of 3 USD per kg (IRA) but additionally from another subsidy from California in the amount of 1 to 2 USD per kg (LCFS). In only a few years, the company wants to produce and sell 300 tonnes per day. That would mean an annual turnover of 400 to 500 million USD and the possibility of fueling 7,500 trucks per day.

Mobile H2 refueling stations can be produced for two-thirds of the price of a fixed fueling station and allow for increased flexibility. Four of them are currently under acceptance. The integration of Romeo Power (batteries) is proceeding according to plan. This involves the automation of the battery production as well as the integration of the FC stacks (Bosch) in a production line for the two truck variants, with considerable cost reduction potential.

Nikola aims for 1.7 percent market share in the USA in 2026

The truck maker expects to sell a total of 1.7 percent of all the Class 8 trucks in the US. According to ACT Research, in 2026 around 360,000 trucks of this class will be demanded in the USA. That means: 1,000 to 1,250 BEV and 5,000 to 6,000 FCEV units. With that, Nikola would be looking at a turnover in the billions range. Sales from hydrogen is to reach 450 to 500 million USD in 2026 at any rate. Starting 2025, the company plans to attain a sustainable increase in earnings.

My conclusion

For me, the share of Nikola Motors has the highest price potential out of the analyzed H2 shares. The investment in this share is at the same time certainly the most speculative, as the company must be seen and assessed as a startup. A few pieces of good news can immediately lead to larger swings to the upside, as the share price is very strongly influenced by short sellers (about 105 million shares sold short as per March 2, 2023, which corresponds to over 25 percent of the free float).

Thus, STA Research has rated the share as a “strong buy” – with initial price target of 5 USD. The average expectation of six analysts sees the stock at 8.20 USD in the course of the next 12 months. I share this expectation. As a result of the figures for the 4th quarter, however, Deutsche Bank (3 USD) and Wedbush (4 USD) have reduced their price targets for the time being. For me, these are momentary snapshots, as every quarter leads to new appraisals, but investment in a startup should be seen as an engagement for the long term.

Proper growth will begin in the second half of this year with the delivery of the Tre FCEV (and the sale of hydrogen) and could then dramatically decline in the following years. Nikola must acquire new liquidity, however, which I see as unproblematic, considering the prospects and partners. The current weak prices remain buy prices. However, it is undoubtedly a highly speculative investment. Think of yourself as an investor investing in the early hours of a startup. With Tesla, the beginning years were very rough, but then they reached high altitude.

Will Nikola become another Tesla – but for trucks?


Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.

Written by author Sven Jösting, March 5th, 2023


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