Nikola Takes on the Hydrogen Challenge and it is working on building hydrogen plants, part of a fuel network that will power their entry into the zero-emissions truck market. The company has signed deals with hydrogen producers who will supply hydrogen for Nikola vehicles in the US and Canada. They aim to have enough fuel for 7,500 heavy-duty trucks by 2026.

The hydrogen network is crucial for Nikola’s plan to assemble hydrogen fuel-cell electric trucks later this year. These trucks need hydrogen to operate, unlike battery-electric vehicles that can recharge with electricity.

Nikola began work on a hydrogen extraction plant in Buckeye, Phoenix last year. They expect to produce 30 metric tons of hydrogen a day by 2024. They’re also negotiating an investment agreement with Fortescue Future Industries.

Nikola has a companion storage plant planned with Plug Power Inc. The plant will turn hydrogen gas into liquid, making it easier to transport. Nikola intends to ship the hydrogen to three filling stations in California by truck.

This hydrogen network is a major challenge for Nikola as they compete with battery-electric truck rivals such as Tesla and diesel truck manufacturers. Many truck makers expect the limited availability of hydrogen to limit demand for hydrogen trucks.

HYLA, an extension of Nikola, provides cost-effective hydrogen solutions. Their goal is to transition the commercial trucking industry to zero-emissions. They take a technology agnostic approach to producing hydrogen and aim to develop a low carbon footprint at a competitive cost compared to diesel.

Nikola’s executives are working to restore the company’s reputation after founder Trevor Milton was found guilty of securities fraud last year. Nikola settled an SEC probe for $125 million. The company has seen its cash reserves diminish and stock price drop, making it harder to bankroll projects on their own.

Nikola has orders for 1,000 hydrogen trucks, with 800 going to Anheuser-Busch InBev NV. They have scaled back production of their battery-electric model to conserve cash.

Nikola’s hydrogen trucks can travel 500 miles before refueling with hydrogen, compared to 300 miles for some battery-electric trucks. They have hydrogen supply commitments from KeyState Natural Gas Synthesis, Wabash Valley Resources, TC Energy, and Plug Power.

Nikola is offering suppliers the chance of a dedicated fleet of trucks that will consume their hydrogen. They plan to offer their trucks on leases that include the cost of hydrogen fuel, factored into lease payments at a fixed or variable rate.

Nikola, a seven-year-old company, had rolled out its first battery-powered electric trucks in 2022. This year, Nikola plans to produce heavy-duty trucks fueled by hydrogen fuel cells.

Last year, the company had orders for 1500 trucks, which included both battery and hydrogen fuel-cell models. This is a far cry from the 14,000 hydrogen fuel-cell truck orders reported in 2020.

Founder Trevor Milton, who served as CEO until 2020, promised investors $10 billion in revenue. Nikola went public in 2020 after merging with VectoIQ Acquisition Corp. Its valuation soared, at one point surpassing Ford Motor Co. However, soon after the stock’s debut, investors started to question the company’s processes and revenue.

In September 2020, a short-seller investor accused Nikola of being an “intricate fraud.” The company disputed the fraud accusations, but Milton resigned as executive chairman. In late 2021, Nikola agreed to pay $125 million to the SEC to settle allegations of fraud. In July 2021, the Justice Department charged Milton with securities fraud and wire fraud. His trial began in September.

Nikola, with new leadership, is seeking to recapture momentum by offering leases on hydrogen-electric trucks that include the hydrogen fuel. The firm expects to acquire low-cost hydrogen and sell it at prices competitive with diesel. Koziner, who was promoted to president of Nikola’s commercial business, says that the firm will also introduce the hydrogen-fueling infrastructure to support the trucks.

The trucking industry has long been interested in hydrogen’s potential as a lighter alternative to batteries. However, hydrogen fuel cell trucks face a challenge in limited availability of clean hydrogen made from zero-carbon or low-carbon processes.

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