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Nikola Motors: Current Developments and Market Outlook

Nikola Motors: Current Developments and Market Outlook

The press conference in February 2024 regarding the fourth quarter and the entire year of 2023 has confirmed an optimistic assessment of Nikola Motors. In the past year, 42 TreFCEV trucks were manufactured, of which 35 were delivered in the fourth quarter. These trucks are already in high demand, although there are still supply chain bottlenecks. Nikola plans to sell between 300 and 350 hydrogen trucks in 2024. Notably, the impressive availability of HVIP vouchers is a key advantage, with 99% of the requested 360 vouchers for hydrogen-powered vehicles being sold, offering a subsidy of up to $408,000 per vehicle.

Following the Hannover Messe in April 2024, which placed a strong focus on the hydrogen and fuel cell industry, Nikola has taken smart steps to concentrate on key markets. Particularly in California and Canada, where extensive funding programs exist, the demand for hydrogen vehicles is expected to rise. Through its subsidiary HYLA, Nikola plans to supply critical locations, such as port facilities in California, with hydrogen using mobile refueling stations before establishing permanent stations.

Additionally, Nikola has expanded its partnership with FirstElement Fuel, which operates hydrogen stations at important hubs and supplies 100 to 200 trucks daily with hydrogen. Currently, nine locations within the HYLA program are under development, with the potential for over 60 future hydrogen refueling stations.

The leadership team has also been strengthened. The new CFO, Thomas B. Okray, brings valuable experience from his time at Eaton and Amazon, while Jonathan Pertchik, the new board member, adds his successful track record from TravelCenters of America. These leadership changes are promising and position the company well for upcoming challenges.

With over $460 million in unrestricted cash, Nikola is well-prepared to tackle future challenges. The company is implementing cost-saving measures and optimizing production, which should help reach the break-even point sooner. For 2024, sales targets have been set at 400 to 450 trucks, which corresponds to an expected revenue of $150 to $170 million.

In summary, Nikola Motors is on a promising path. The demand for hydrogen vehicles is increasing, and ongoing innovations in hydrogen infrastructure will further promote the company’s growth.

AI-generated text based on the following sources:

  1. Nikola Corporation. (2024). Investor Relations.
  2. Reuters. (2024). Nikola Motors: Fourth Quarter and Full-Year Financial Results.
  3. Deutsche Presse-Agentur (dpa). (2024). Current Developments in the Hydrogen Industry
Fuel cells from the Arctic Circle

Fuel cells from the Arctic Circle

Gigawatt production planned in Norway

The Norwegian company REC Solar once produced photovoltaic systems in Narvik. Today, the factory buildings stand empty. With two areas of around 5,000 square meters and cleanroom equipment, they offer good conditions for setting up fuel cell production there. The startup Teco 2030 plans to manufacture PEM fuel cells with a high power density on a gigawatt scale there in just a few years’ time.

Teco 2030 is a spin-off of the Teco Maritime Group, a service provider for “greener” ship transport with 30 years of experience and around 150 employees. It therefore made sense for Teco 2030 to consider ships as one of the first possible areas of application for the new product. The aim is to develop a high-performance fuel cell for maritime use and to produce it on a gigawatt scale. CEO of the spin-off is Teco founder Tore Enger himself.

On board as a partner is AVL, a company with 12,000 employees and headquarters in Austria. The technology developer from the automotive industry knows all about fuel cells and has its own facilities in Graz to develop, simulate, test and optimize them.

In close cooperation, Teco 2030 and AVL have developed a new PEM fuel cell. According to information by the companies, it is unique in its power density and flexibility. For the high power density, especially surrounding the actual stack, the knowledge of the partners and suppliers was pooled. Beckhoff Automation and Harting Technology are two of the German suppliers who are helping to ensure that development continues “at record speed,” as Teco 2030 stressed.

The complete design of the product, from the membrane to the complete system, Teco 2030 and AVL jointly developed. However, both the bipolar plates and the membranes are to be externally manufactured. In Narvik, Norway the components will then be assembled first into cell stacks, then into fuel cell modules and finally into complete systems. At the beginning of April 2024, when a delegation from Hannover Messe visited the site together with journalists, the main things to be seen there were large, empty halls and a few offices. The prototype production fits into a single room.

Shell tanker as first use case
One of the first products will be a fuel cell power generator (FCPG) in the format of a standardized 40-foot container. As part of the research project HyEkoTank, the fuel cell container will have its first practical use on the bitumen tanker Bitflower from Shell. For the design, the Norwegian classification association DNV has given an “approval in principle” (AiP) for employment in a research project on ocean-going vessels.

The fuel cell system can be seamlessly integrated into the switchgear of a ship, according to Teco 2030. The AiP concerns the fuel treatment system, the rooms with the FC modules, the electronics, the battery, the HVAC (high voltage AC) technology, the auxiliaries, the inertization system and the airlock.


The bitumen tanker Bitflower is to be the first ship to drive with a fuel cell from Teco 2030, Source: Shell

The fuel cell is expected to have an output of 2.4 MW, so just under 3,300 hp. That is less than the current engine can deliver, but Teco 2030 stresses that the charter speed of the ship can be maintained with it. “This capacity is sufficient to operate the ship 100 percent emissions-free with hydrogen as fuel, without producing greenhouse gas emissions,” says Tor-Erik Hoftun, Chief Strategy Officer of Teco 2030.

While many FC systems require a relatively large battery as a power buffer for the drive, the new fuel cell should be able to react very flexibly. How large the external battery will ultimately be designed depends on other requirements on the ship. “The fuel cell is dynamic and can replicate the reaction time of diesel engines, which means that the installation can be optimized in terms of external battery size and power strategies,” says Hoftun.

In addition to the fuel cell unit, the system includes an exchangeable tank that can hold 4,000 kg of hydrogen at 350 bar. The tanker can therefore also take new fuel on board in ports that do not have a special infrastructure for hydrogen refueling.

Hydrogen storage, however, has so far been a major limitation of the technology. During a one-week deployment of the ship, it should be possible to provide about 70 percent of the propulsion energy with the fuel cell. During the test, the new components are to be placed on the deck of the ship, so that the diesel engine can remain in place. Where the fuel cell will sit in the future has not yet been determined. Clear, however, is that space on board is always an issue – especially for retrofits. “The system has a compact design to simplify retrofitting at new or existing locations engines were previously installed,” according to Hoftun.

Largest retrofit project
The project is part of the EU program Horizon Europe and is, according to Teco 2030, the largest current retrofit project for a fuel cell ship. Shell wants to invest 5 million USD in the project; from the EU should come 5 million EUR. At the end of the project, Technology Readiness Level 8 should be reached. Teco 2030 assumes that the supply with the standardized fuel cell container can be carried over to many sea-going and inland waterway vessels.

A number of other research projects have been launched in parallel: For a ferry in Croatia, a consortium to which Teco 2030 also belongs received a commitment of over 13 million euros from the EU’s Horizon program in 2023.

In another project, Teco 2030 together with AVL want to demonstrate a retrofit solution for a 40-tonne truck with four 100 kW stacks still in the first half of this year. Another site of construction is the development of a fuel cell generator with 0.6 to 1.6 MW in a smaller container. This should be able to supply on-board power for ships or construction site power as needed. Participating in this project are the Norwegian state-owned enterprise Enova and the Swiss construction company Implenia. If projects in preparation, in the technical concept phase or with outstanding financing are also included, the list of projects extends over several pages.

Ship transport must become greener
To turn research projects into commercial applications, Teco 2030 still has to overcome two hurdles, however, which should not be underestimated: Firstly, production must be set up quickly. And secondly, the technology must assert itself alongside the many alternatives in the dynamic market of sustainable mobility.

As far as the market is concerned, the managers of Teco 2030 are very positive. Political pressure on ship transport companies is growing; they need to make their ships more climate-friendly. In relation to other sources of emissions, maritime transport in the EU was a rather small item, accounting for 3 to 4 percent of CO2 equivalents, but the movement of goods is growing. This is why since January 2024 European emissions trading has also applied to large ships starting from 5,000 gross register tons that harbor in ports within the EU.

The International Maritime Organisation (IMO) also tightened its climate targets in the summer of 2023: By 2040, greenhouse gas emissions are to be reduced by at least 70 percent compared to 2008 levels, whereby 80 percent is strived for.

Maybe the strongest pressure is being made by the customers. Many consumers value climate-friendly products. And if, as a result, large corporations such as Amazon or Microsoft insist on climate-neutral transport of their goods, the shipping companies have to come up with something – even if they would have more time according to the laws.

Prototype production in Narvik, Source: Hannover Messe

The Teco managers therefore see a large market for their fuel cells. Their potential analysis is based on a paper by Hydrogen Europe from the year 2021. For this, over 60 types of ships were examined for possible climate-friendly drive technologies. Depending on the application, three types of drive have proven to be economical. Ammonia in combination with solid oxide fuel cells is particularly suitable for heavy ocean tankers. For small ships that have frequent opportunities to refuel, pressurized H2 tanks in combination with PEM fuel cells are the best option. Liquid hydrogen in combination with PEM fuel cells should cover the area in between, in which container ships in particular, but also some large ferries and cruise ships, move.

Of these three fuels, gaseous hydrogen is the cheapest, followed by liquid hydrogen and finally ammonia. The bottom line is that the combination of PEM fuel cells with hydrogen in liquid or gaseous form is the best technology available in terms of total cost of ownership (TCO) for around 77,000 ships worldwide.

But there are also completely different theories, for example in the report by the ship classifier and consulting service provider DNV from the year 2023. Of the new ships ordered by July 2023, only five had a hydrogen drive. The technologies for future decarbonization highlighted in the report are diverse: They include onboard carbon capture, support from wind energy and even nuclear drives. Explicitly mentioned among the fuel cell drives is the solid oxide fuel cell, operated with hydrocarbons or ammonia.

Liquid hydrogen as fuel is also conceivable, explains the report using the example of the Norwegian ferry MS Hydra, which runs on a PEM fuel cell. But the DNV stresses: Compared to other fuels, even liquid hydrogen has a low volumetric energy density. The combination of gaseous hydrogen and PEM fuel cell accordingly doesn’t happen.

Hoftun and Enger are not deterring competition from liquid and near-liquid fuels. As the PEM fuel cell can operate at low pressure, hydrogen can, for example, also be produced on board from ammonia or methanol, they explain. Whether this approach, which combines several non-established technologies on board, will convince the mostly conservative ship transport companies remains to be seen.

Production start planned for 2024

Manual production should start in 2024 if possible, Source: Teco 2030/Hannover Messe

Teco 2030 is still working on the prototype, which has not yet delivered the desired performance on the test stand in Graz. Here too is the optimism high: “We are making good progress and expect to reach full performance on the test bench in a few months’ time,” says Hoftun. As soon as this is achieved, manual production can start in the so far empty halls. This step is planned for the third quarter of 2024. Around the same time, so they hope, will a DNV type approval come. With the initial experience and approval, an automated production line is then to emerge – end of 2025 for the stacks, beginning of 2026 for the whole fuel cell modules.

To be able to set up the largely automated production quickly, Teco 2030 is relying on the experience of ThyssenKrupp, which is to take over the construction of the production line. In 2027, the Norwegians want to reach an annual production capacity of 800 MW. “Unit costs fall as soon as you start reaching economies of scale and robot-assisted production,” says Teco 2030 CEO Tore Enger. And they are set to fall further with every expansion. For the eponymous year 2030, Teco has named a target of 700 euros per kW and an output of 3.2 GW.

“Following the previous investments of around 60 million euros, we assume that we will need a further 40 million euros to achieve the targeted annual production of 800 MW, around 20 million euros of which for the actual production line,” says Enger. Around 4 million USD is to shortly come from India, from infrastructure company Advait Infratech, which also has its own division for green energy and hydrogen technologies. Advait is securing a 51 percent stake in a joint venture that is to produce and market fuel cells in India and South Asia in the future.

Will there be enough skilled workers at the other end of the world, in Narvik, who want to work in a factory 200 kilometers north of the Arctic Circle? Enger and Hoftun are sure that this will not be a problem either. “We are seeing a lot of interest from professionals in this field who want to move to Narvik,” says Hoftun. They’re relying not only on strong automation, but also on the nearby university and the attracting power of nature in northern Norway. You can practically get on your skis right on your doorstep. And even in the factory hall, the view out of the window is of the Ofotfjord.

The area around Narvik is remote, but popular with nature lovers, Source: Hannover Messe

Norway: Offshore wind energy urgently needed

Norway is known for its very cheap electricity, which comes almost entirely from hydropower. The country is thus also attracting international investors, especially when it comes to green technologies of the future. In Norway is emerging, among other things, battery factories, data centers and a hydrogen economy. But the available hydropower is by no means infinite. While Norway currently exports around a tenth of its electricity, the electricity balance is expected to be neutral starting 2028. In addition to the new factories, electrification is an important driver of electricity consumption. For example, natural gas extracted off the coast is to be electrically compressed into LNG in future. Hydrogen production – both by electrolysis and from natural gas – does not have any significance in the five-year forecasts of the state electricity producer Statnett. It will come later. A massive expansion of wind power generation off the coast should provide a remedy. The first state-tendered project, from this March, is expected to have a capacity of 1.5 GW.

The hydrogen partner site

The hydrogen partner site

Online marketplace brings together supply and demand

Like a dating site, the international hydrogen marketplace Localiser has been connecting the players in the hydrogen value chain for two years. Around 500 companies have been registered so far. The marketplace now also includes other European countries.

Hydrogen is considered an environmentally friendly alternative to fossil fuels and plays an important role in decarbonizing industrial processes, storing renewable energy and promoting climate-neutral transportation. In updating its hydrogen strategy, the federal government assumes that the demand for hydrogen will increase to 95 to 130 TWh annually by 2030, mainly due to changes in industry and transport. The hydrogen economy is developing dynamically, but the question arises as to how the demand for hydrogen can be met.

The company Localiser RLI GmbH has on behalf of the ministry of economic affairs, labor and energy of the German state of Brandenburg and the Berlin senate department for economics, energy and enterprises developed the Wasserstoffmarktplatz (hydrogen marketplace). It was created as part of the development of the hydrogen roadmap for Brandenburg and the capital region. This free platform enables all players along the entire hydrogen value chain to network internationally. The hydrogen supply and demand is shown geo-referenced on maps. This makes searching for and offering hydrogen much easier.

“The new marketplace makes the potential of the hydrogen economy visible and quickly brings together players along the entire value chain. Such an instrument has been missing so far and is unique in the country,” stated Kathrin Goldammer, managing director of Localiser RLI GmbH. Together with Oliver Arnhold, she leads the company.

The platform went online at the end of March 2022, and by April 2024, around 500 companies were registered on the hydrogen marketplace.

The hydrogen marketplace is expanding
Six months after release of the platform, Localiser expanded the area of the watering hole that is the hydrogen marketplace. The Wasserstoffmarktplatz, which was initially only available in Berlin and Brandenburg, has been expanded to cover all of Germany, so hydrogen requests and offers from all of the German states can now be entered free of charge. Oliver Arnhold, managing director of Localiser, states, “We noticed the exponential growth in hydrogen demand throughout Germany and saw the hydrogen marketplace as the perfect solution for nationally networking hydrogen players.”

Due to the positive feedback from Germany, Localiser RLI GmbH decided, in partnership with the project HyTruck, to also offer the hydrogen marketplace internationally. The platform will be gradually expanded to cover all of Europe and will later be able to display global hydrogen supply and demand geo-referenced. The hydrogen marketplace is currently available in Denmark, Estonia, Finland, Ireland, Lithuania, Latvia, Norway, Poland, Sweden and the United Kingdom. Other countries will follow soon.

Use of the hydrogen marketplace is free of charge. Players in the hydrogen economy can register via the website of the company Localiser (localiser.de). After completing the form, you will receive an e-mail with a link to register in the app. Clicking on the link will take you to a subpage of the app where you will need to enter your details and create a user account. After logging in, users have access to their project.

The platform enables the visualization of many data sets, from renewable energies to infrastructure (roads, rail, grid and gas) and CO2 emissions. It also automatically suggests possible partner companies. In addition, the hydrogen marketplace provides an overview of the status of the infrastructure, including hydrogen refueling stations and future pipelines. This gives users comprehensive insight into the local hydrogen market.

The hydrogen marketplace is being continuously expanded and improved by Localiser RLI GmbH. In September 2023, the new matching function was introduced. This function automatically suggests potential business partners for each hydrogen player, making networking much easier. The marketplace provides an overview of all hydrogen offers and requests. It is possible to filter according to specific criteria such as company, category and project status. Clicking on a result opens a chat window that allows registered users to directly contact other companies. A summary of all matches can also be viewed in this overview. The marketplace can also be integrated on other websites as a white label.


Oliver Arnhold and Kathrin Goldammer have set up the hydrogen marketplace, Source: Reiner Lemoine Institut

Register at www.localiser.de/en/wasserstoff-infrastruktur-planen

Green hydrogen on the high seas

Green hydrogen on the high seas

H2 generation on floating offshore wind power plants

How to ramp up the production of green hydrogen in just a few years and distribute it quickly across the country independently of the development of the H2 core network explained Jens Cruse, shipbuilding engineer, at the end of January this year before an expert audience in Hamburg.

Self-sufficient, floating wind power plants, placed in European waters, are to produce the molecule required primarily in industry for defossilization, directly on the platform by electrolysis from desalinated seawater, and to bind it to the LOHC (liquid organic hydrogen carrier – see also p. 23). Shuttle tankers, which have long been common in the oil industry, could then transport the valuable cargo to land or to the nearest port on a monthly basis, for example.

Jens Cruse, who after years of research set up his own company, lists the advantages of direct H2 production on the high seas: “Such a model can save up to 50 percent of investment costs because neither electricity nor gas pipes have to be laid.” The expensive grid connection is also eliminated, which speeds up the entire process because you don’t have to wait for lengthy approval procedures. Operating costs are also reduced if you are not tied to a pipe system. The so-termed offshore H2 generators are intended to be used where there is a lot of wind, almost around the clock.

“You don’t have to travel to Patagonia, Namibia or Australia,” says the founder and managing director of Cruse Offshore GmbH. “We have this right on our doorstep in Europe, particularly off the coasts of Norway, Ireland and Scotland,” he says. The electrolysis systems that are still relatively expensive today could run the whole year there, with a maximum of free to harvest wind energy.

Definitely more cost-effective
Producing hydrogen at sea by integrating the electrolyzer into the wind power station would cost even less than producing hydrogen in an offshore wind farm that is connected to the water splitting system via a power cable. Another advantage of the integrated solution is that the low-voltage direct current from the wind power station can be used directly by the electrolyzer. This saves on the conversion of electricity and the associated losses. Transporting hydrogen via pipeline is known to be more cost-effective than transmitting the electricity via lines. By connecting the electrolyzer directly to the wind power station, the basic costs are also eliminated that would otherwise have to be taken into account for a platform at sea or a land area for parking the container with the electrolysis plant.

In the model, the floating system withstood the heaviest loads, states Professor Moustafa Abdel-Maksoud, director of the Institute of Fluid Dynamics and Ship Theory at the Technical University of Hamburg (TUHH), who, together with his team, carried out simulations to optimize the system for extreme weather conditions at sea and tests in the TUHH’s wind and wave tunnel. Not even a simulated wave more than 16 meters high impaired the functioning of the system. “The system works perfectly, and it’ll pay off,” says Abdel-Maksoud. “We are technically and scientifically capable of realizing this,” he says. The innovative technology also avoids competition for space with conventional offshore wind farms and is not dependent on surplus electricity for H2 production.

Technically and economically feasible
After years of preparatory work and scientific tests, Cruse with a consortium is now planning to build a 5‑MW plant that combines wind power, seawater desalination, electrolysis and H2 storage in LOHCs. This is being done as part of the three-year research project ProHyGen, which is receiving support from the German economy ministry (BMWK) [1]. This is a joint project with, besides Cruse Offshore GmbH and the TUHH, also the university Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU), the machine and gearbox manufacturer Renk and the company specializing in the processing of crude oil derivatives H&R.

That the production of green hydrogen on floating plants is economically and technically feasible is also demonstrated by another BMWK-funded project, by research institute Fraunhofer ISE [2]. Its concept also envisions the climate-neutral gas being transported by ship, but not bound to LOHCs, instead stored in pressurized tanks in which the hydrogen is compressed to 500 bar.

The 5‑MW prototype from ProHyGen is to be deployed in the German exclusive economic zone (EEZ). The foundation of the planned H2 offshore generator will consist of four “floaters” that are connected under water and filled with ballast water. The material used is the sheet steel in shipbuilding. One of the floaters carries the wind power station; another houses a plant for desalinating seawater as well as an electrolyzer and a component for storing the hydrogen in an LOHC. Below this is a rotating buoy and the anchor cables used to attach the H2 offshore generator to the seabed. Two further floaters consist of double-walled tanks in which the LOHC carrier fluid is stored. These are normal oil tanks. The existing oil infrastructure can also be used in other ways with this process, stresses Cruse, indicating the railways and waterways that already connect industrial ports with industrial sites today. Hamburg, for example, offers the best conditions for this, because heavy metal production companies located in the port are already potential customers for hydrogen. In addition, the tanks with the hydrogen bound to the carrier oil can be distributed deep into the country by train or barge, as is currently still the case with fossil fuels. This long-established transport network extends to neighboring European countries. A functioning infrastructure is also an important criterion for a rapid market ramp-up of the hydrogen economy.


This sketch shows where the necessary systems are located

Investors wanted
“After testing of the prototype, the system will be scaled up to 15 MW and in the course of 2025 produced in series,” explains Jens Cruse, who has registered a patent for the process and is responsible for the industrial utilization of the concept. A further goal of the joint project ProHyGen is the planning of offshore H2 parks in the gigawatt range. If all goes well, installation of the first 3‑GW park producing green hydrogen could begin in the second half of 2027, according to Cruse. “To do this, however, we need financially strong partners who want to support these future-oriented innovations,” he says.


The green hydrogen bound in an LOHC can be transported to land by ship

References:
[1] https://www.tuhh.de/fds/research/current/modular-ship-assist-1

[2] https://www.ise.fraunhofer.de/de/presse-und-medien/presseinformationen/2023/wasserstofferzeugung-auf-dem-meer-fraunhofer-ise-entwickelt-konzept-fuer-wasserstofferzeugung-auf-einer-offshore-plattform.html