BARRON´S
Nikola Sees New Competition From an Unlikely Source — a Giant Oil Company
Last Updated: Oct. 11, 2020 at 11:37 a.m. ET First Published: Oct. 9, 2020 at 12:14 p.m. ET
By Al Root
[/url]
[url=https://www.marketwatch.com/news/oil-giant-shell-vows-to-become-carbon-neutral-by-2050-01587018604]Oil companies might have something to say about the development of the U.S.
electric-vehicle industry. But it may not be what investors might expect.
Friday,
French energy giant Total (ticker: TOT)
announced an investment in
Hyzon Motors, a U.S. company making
hydrogen fuel-cell-powered heavy-duty trucks. If hydrogen-powered trucks sound familiar, it’s because that’s what
Nikola (NKLA)
aspires to produce as well.
The investment amount wasn’t disclosed, but
Bloomberg reports it was $15 million, valuing the fuel-cell company at $200 million. Total and Hyzon didn’t immediately respond to requests for comment.
“Total’s ambition [is] to get to net-zero emissions by 2050,” said Girish Nadkarni, CEO of Total Carbon Neutrality Ventures, said in Hyzon’s news release. “We are pleased to partner with Hyzon, one of the leading suppliers of
hydrogen fuel-cell powered commercial vehicles, and look forward to working closely with them as they expand their operations around the world.”
Hyzon’s valuation is small. Nikola, for instance, has a market capitalization of about $9 billion.
Hyliion (HYLN), another alternative-fuel trucking company supplying electric powertrains, is worth about $5 billion based on the roughly 162 million shares outstanding after the company completed its
SPAC merger.
Still, Hyzon plans to deliver 5,000 fuel-cell trucks over the next three years and plans to have enough capacity to deliver 40,000 vehicles a year by 2025. By comparison,
Paccar (PCAR), a leading truck maker delivered almost 200,000 trucks worldwide in 2019. Cowen analyst
Jeffery Osborne believes Nikola will deliver about 9,000 fuel-cell-powered trucks in 2023 and 2024.
Nikola also plans to build and own
hydrogen filling station capacity, making its business model a little different from other truck makers.
Its stock might be reacting to the news. Nikola shares are down 2.6%, at $24.36, in recent trading. The
S&P 500 and
Dow Jones Industrial Average are up 1% and 0.8%, respectively.
More competition is coming for all alternative-fuel trucking start-ups, and some is even coming from the oil industry. It existed before the Total announcement, of course, but investors, frankly, don’t always know about all players investing in hydrogen and fuel-cell tech. The alternative-fuel heavy-duty trucking industry is still in its infancy.
https://www.marketwatch.com/articles/nik...quote_news