Contact

Norway doubles number of H2 projects

Norway doubles number of H2 projects

Hesitant politicians put the brakes on the expected upswing

Activities in the Norwegian hydrogen industry have doubled in the last two years. Great progress has also been made in cooperation with Germany to be able to export hydrogen on a large scale from 2030. However, in order to move from project planning to investment decisions, risk relief in the form of contracts for difference is required.

In October 2021, the minority government led by the Labour Party and the Center Party announced in its government platform that it will contribute to building up a coherent hydrogen value chain where production, distribution and use is developed in parallel. It also announced that it will set a target for yearly production of renewable and low-carbon hydrogen by 2030 and to consider setting up a state-owned hydrogen company.

Advertisements

Hydrogen is a vital part of the government’s roadmap for an industrial revival on the Norwegian mainland. Norwegian petroleum and energy minister Terje Aasland has on several occasions stated that the government plans to have enough domestically produced hydrogen to cover own demands by 2030. However, the government is yet to reveal how much demand it expects or how it plans to achieve this.

Although industry is awaiting a clear path and ambition from the politicians, much has already been set in motion. The 2020 Norwegian Hydrogen Strategy emphasizes that Norwegian industry is well positioned to take a leading role in the hydrogen economy, concentrating efforts on areas of particular potential for industry growth and value creation, such as clean hydrogen production and offtake in the maritime sector and heavy industries.

The strategy was complemented by a Hydrogen Roadmap in 2021, which provides an ambition to establish five hydrogen hubs for maritime transport, one or two large industrial projects with production facilities for hydrogen and five to ten pilot projects for the development of cost-effective hydrogen solutions and technologies by 2025. The Norwegian state agency Enova in December 2021 granted support to three large industrial projects – led by Yara International, Tizir Titanium & Iron and Horisont Energi – and in June 2022 followed up with further support to five hydrogen hubs along the Norwegian coast, as well as 7 hydrogen and ammonia vessels. Further, the government has provided funding for two research centers of expertise on hydrogen and ammonia.

From 50 to 126 projects in two years

We at Norwegian Hydrogen Forum recently conducted a screening of the Norwegian Hydrogen Landscape,[1] and what we found was that the number of projects and activities had more than doubled since our last screening – from approximately 50 projects in 2021 to 126 in April 2023. We found 51 plans to produce hydrogen or hydrogen derivatives, totalling a projected production capacity of almost 9.5 GW by 2030. Although 47 of these projects are renewable hydrogen projects, almost 60 percent of the projected production capacity is expected to be low-carbon in 2030 (see image). Whereas most of the renewable hydrogen projects are planned for domestic consumption, three of the four low-carbon hydrogen projects are export-oriented.

With a capture rate of around 95 percent, using Norway’s vast natural gas resources and storing the captured CO2 under the seabed to produce hydrogen with extremely low emissions is seen as the smartest way forward by politicians and industry alike. In this way, the hydrogen market can be rapidly boosted, the necessary infrastructure built, and the way paved for the huge volumes of renewable hydrogen. Large quantities of green hydrogen can be produced from the late 2030s, when offshore wind power production on the Norwegian continental shelf gains momentum.

With a capture rate of around 95 %, utilizing Norway’s vast natural gas resources and storing the captured CO2 below the seabed to produce hydrogen with extremely low emissions is generally seen by politicians and industry alike. In this way, the hydrogen market can ramp-up quickly, to build the necessary infrastructure and thereby to pave the way for the massive amounts of renewable hydrogen. Large quantities of green hydrogen can be produced from the late 2030s and onwards as offshore wind energy production picks up speed on the Norwegian Continental Shelf.

To enable this, the Norwegian government supports the establishment of a full-scale value chain for carbon capture, transport and storage in the North Sea. The Longship project is ongoing, in which 400.000 tonnes of CO2 from Heidelberg Cement’s plant at Brevik shall be stored permanently below the seabed by the Northern Lights Joint Venture. The Norwegian government has also conducted several licensing rounds for further CO2 storage sites, and the offshore industry currently has plans to develop up to 50 million tonnes of yearly CO2 storage capacity by 2030.

Among the projects are several hydrogen technology manufacturing facilities, of which the most well-known is Nel Hydrogen’s recent opening of the world’s largest automated factory at Herøya. Both Hystar and HydrogenPro also have bold ambitions for electrolyzer manufacturing, and Norway is particularly well-positioned to contribute to a large share of the 100 GW electrolyzer manufacturing capacity needed in the EU to reach its 10 million tons of renewable energy production target.

Further, there are currently several plans to scale fuel cell manufacturing in Norway. For example, TECO 2030 is building up Europe’s first giga production facility of hydrogen PEM fuel cell stacks and modules in Narvik and targets 1,6 GW output capacity in 2030. On May 15th, they produced their first stack. These and other companies could sharply increase and multiply their manufacturing capacities in Norway.

Local companies shoulder development of H2 economy

The actors involved in building up the Norwegian hydrogen industry come partly from the country’s strong historic research and industrial community on hydrogen and hydrogen technology. Norway produced its first ammonia from hydropower and water at Hydro’s Rjukan site already in 1929. But also from the strong renewable industry, the maritime industry, and the offshore oil and gas industry. In addition to significant competence in the fields of electrolyzers, fuel cells, storage tanks and hydrogen refuelling stations, Norway is at the forefront when it comes to developing new solutions in areas such as carbon capture, compressors, bunkering solutions for maritime application, hydrogen and ammonia ships and innovative concepts for offshore hydrogen production. The country’s substantial sub-suppliers in the oil and gas industry can further utilize its competence to develop renewable and low-carbon equipment and appliances for the hydrogen economy.

Private-public collaboration

Although there is political agreement that the CO2-price shall increase from 952 NOK in 2023 to 2.000 NOK by 2030, there is still a challenge that fossil fuels are cheaper than hydrogen-based fuels. To go from project planning to final investment decision, there is a need for a public-private partnership in which risk relief is given until hydrogen reaches price parity with fossil fuels. The favoured measure among Norwegian Hydrogen Forum’s members is a Contracts-for-Difference (CfD) scheme.

We have suggested to the government that a first auction should take place as soon as possible in 2024 to ensure predictability for the many companies that are now at a stage where they must take final investment decision or look for other projects. In last year’s approval of the state budget, the Norwegian Storting (parliament) requested the government to develop a plan for a CfD scheme in 2023. Petroleum and Energy Minister Terje Aasland has confirmed that the government will deliver this plan accordingly.

Great leap for German-Norwegian partnership

Whereas uncertainties remain when it comes to developing the domestic value chain for hydrogen, several giant steps have been taken to establish a value chain for large-scale hydrogen exports from Norway to Germany. In January 2022, Norwegian prime minister Jonas Gahr Støre issued a new era of bilateral energy and industry collaboration when he visited German chancellor Olaf Scholz in Berlin to set up a renewed energy and industrial partnership between the two countries. Since then, ministers from both countries have travelled back and forth in an impressive tempo, not least due to the Russian full-blown invasion of Ukraine a month after Støre’s visit.

Since Vice-Chancellor Robert Habeck visited Oslo in March last year, a feasibility study on large-scale exports by pipeline has been ongoing, and the result of that study is expected soon. If a decision is taken to go forth with the plans to build a pipeline, Norway could by the beginning of the 2030s export two to four million tonnes of hydrogen directly to Germany (see fig. 1). The pipeline will be built with dimensions that are 30 % larger than current low-carbon production plans and will have the capacity to include renewable hydrogen both from the Norwegian mainland and from offshore wind farms along the way.

The close political collaboration has been followed by a string of industrial collaboration projects. Firstly, we have a Memorandum of Understanding (MoU) with the German Hydrogen and Fuel Cell Association (DWV), with which we regularly meet in different settings, for example at stage at this year’s Hannover Messe to discuss the importance of the German-Norwegian partnership .

Secondly, we have a strategic cooperation agreement with Center Hydrogen.Bavaria (H2.B), which we visited with a delegation during a political roundtable meeting in January. Hopefully, this collaboration will contribute both to set up hydrogen exports even to the alps and to scale up the number of heavy-duty trucks with hydrogen as fuel on Norwegian roads soon. The five northern German states (HY-5) also have a formalized collaboration with the Norwegian support agency Innovation Norway.

Equinor and RWE agreed beginning of this year, to cooperate on building hydrogen-ready gas power plants, to jointly develop offshore wind farms that will enable production of renewable hydrogen, and to build low-carbon hydrogen production facilities in Norway with the intent to export by pipeline from Norway to Germany. VNG collaborates with Equinor on the H2GE Rostock project, but also has ongoing collaboration with Aker Horizons and Yara. The German utility EnBW is active in the Norwegian market within development of offshore wind and has advanced negotiations with Skipavika Green Ammonia. On the electrolyzer side, Nel Hydrogen will deliver components for two hydrogen facilities under development by HH2E. Norwegian hydrogen producers also have very good collaboration with German electrolyzer producers, such as Fest and H-Tec. It is probably not a surprise that when the world’s first ferry powered by liquid hydrogen, MF Hydra, came into operation earlier this year, it was Linde that delivered both the hydrogen and the bunkering solution.

These are just a few examples that show the vast opportunities for hydrogen in Norway. Collaboration with Germany will be paramount in realizing this potential, and I am certain that when we yet again screen the Norwegian hydrogen landscape in 2030, we will be seeing an industry in Norway that gives a vital contribution to European emission reductions and energy security.

Author: Ingebjørg Telnes Wilhelmsen, General Secretary, Norwegian Hydrogen Forum

 

Norwegian Hydrogen Forum (NHF) was founded in 1996 and is the national association for the hydrogen and ammonia industry in Norway. NHF works actively to disseminate key information on hydrogen and ammonia research and technology commercialisation, market trends and international policy making. Its core task is to promote its members’ interests towards public authorities and decision makers.

https://www.hydrogen.no/faktabank/det-norske-hydrogenlandskapet

Siemens Energy – Many new technology approaches

Siemens Energy – Many new technology approaches

From the house of Siemens Energy, we’re reading about various projects which, in our view, address many new markets in the field of hydrogen. These involve, for example, the construction of an electrolysis plant where the resulting waste heat can be used for a heat pump and, with this and the production of hydrogen, an overall efficiency of 98 percent can be achieved. Along with Evonik, Siemens Energy also plans to research an innovative H2 technology in the industrial space, for which a new type of electrolyzer is to be developed as part of a pilot project. It involves the production of green hydrogen as a starting product for the manufacture of isophorone diamine (IPDA), which is a raw material used in the production of wind turbine rotor blades. A PEM electrolyzer with a capacity of 8 MW at the colliery Zeche Hannibal (project H2annibal) is to supply 45 percent of the green hydrogen required and, in addition, 100 percent of the oxygen required. A 12,000 tonnes of CO2 are to be avoided through this project.

High order intake – Healthy sales growth

Advertisements

The number alone is already remarkable: 102 billion EUR of orders on hand after the huge plus of over 12.3 billion EUR in the quarter just passed. All the same, a turnover of 8 billion EUR after the 6.5 billion the year before. That makes a significant plus of 24 percent. A loss of 189 million EUR was the result after the second quarter, which includes the loss reported by the wind subsidiary of 374 million EUR.

That the company is not yet in the black rests on the still to be fully integrated Gamesa, which still has to overcome the past, as cost increases for steel and components to fill current or past orders cannot and could not be passed on to the customers. On top of that are costs incurred for the reorganization (release of personnel, supply chain issues). But that will change with new orders, which will be calculated differently and take into account the high growth of the wind industry worldwide. The transition to the profit zone is foreseeable in the next two years. The stock exchange sees it the same.

Siemens Energy is a clear winner in what is being launched worldwide in terms of hydrogen-related projects. There too could wind power via electrolysis produce cheap hydrogen offshore and Siemens Gamesa create further future potential with it, as Siemens Energy also possesses a strong foothold in electrolysis. Consider: Without Siemens Gamesa, Siemens Energy is indeed profitable, but the turnaround at the wind subsidiary, or this business division, represents a major earnings potential that will be unlocked once this unit achieves sustainable profitability. That this will happen is a result of the wind turbine market, which is growing very strongly. Siemens Gamesa envisions good opportunities for some big orders from there.

“The success of the wind business remains the fundamental prerequisite for us becoming a profitable market leader in the topic of energy transition.… From there is coming a market that will become a wave.”

Siemens Energy CEO Christian Bruch

For me, it is clear that the circle in which the company as a one-stop shop can supply the customer in matters of energy, hydrogen and their various use potentials according to the motto “alles aus einer Hand,” is closing. Ultimately, it is companies like Siemens Energy that are increasingly bought again in the portfolios of large capital management firms such as Blackrock, as you see high growth here and can link the whole thing to the term sustainability.

My target price of 30 euros could manifest sooner than expected. Long-term, we see much higher prices here. And perhaps the share price development of Siemens Energy (from 10 to 24 EUR) is the blueprint for the other companies discussed here.

Disclaimer
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, June 9th, 2023

Weichai – Good share price performance

Weichai – Good share price performance

On Weichai, I unfortunately cannot present any new key figures, but the increased share price indicates that, firstly, things are going well with the hydrogen strategy at China’s largest diesel engine manufacturer and, secondly, China’s expected H2 subsidy program allows for positive estimates here. Joy comes from subsidiary Kion, whose stock market value increased by a good 50 percent. One ponders why Weichai continues to have only 30 to 35 percent of the value with which US competitor Cummins Engine does on the stock market. The two companies are very well comparable, even if the Chinese state is involved in Weichai as a major shareholder.

Weichai maintains through the JV with Ballard Power (51:49) still the largest stack production for trucks and buses in China to date, particularly as Weichai by itself owns subsidiary companies that produce commercial vehicles in addition to heavy equipment (cranes; mining trucks; engines for ships, trains, and so on). If there’s a large H2 subsidy program, they’ll have everything in house – from stack production to applications. Weichai Power is my key investment in China in hydrogen and fuel cells.

Advertisements

Disclaimer
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, June 9th, 2023

Plug – Forecasts relinquished again

Plug – Forecasts relinquished again

Plug Power sees itself as a generalist: from H2 production to liquefaction technologies, own electrolyzer production, construction of H2 refueling trailers and stations, and the manufacture of FC stacks for motor vehicles and forklifts. That is the one side of the coin. On the other side, there are various gigafactories that are being built with considerable investment, and require time until sales and profits are generated. In the transition period, high losses will be reported, which can partly be explained with the establishment and expansion of the company. A look at the liquidity alone shows that Plug may have to issue further shares this year in order to finance the company’s ambitious targets, as in addition to capital investment in factories, the large number of strategic acquisitions also cost money.

A sharply rising share of the liquidity – nearly 900 million USD – is not freely available but classified as “restricted” and thus frozen as collateral. On the other hand, Plug certainly has other ways of obtaining new liquidity. I am thinking of sale-leaseback agreements, but also of government support programs and loans under the Inflation Reduction Act. The issuance of a green bond as a convertible bond is also well conceivable.

Advertisements

Figures for the first quarter

Plug Power has presented quarterly figures that contradict the often very full-bodied statements of the executive board. A 210 million USD turnover in Quarter 1 sounds good in comparison to the same period last year. At the same time, however, the loss increased to over 200 million USD, which corresponded to a minus of 0.35 USD per share (GAAP). The wording of the publications gives me the feeling that they want to teach investors in small doses that the short term goals have to be cut back on.

Nevertheless, Plug will continue on its way in hydrogen and develop great potential here, as they are working on a variety of production facilities for stacks, electrolyzers and even hydrogen. My criticism is that Plug is working on too many construction sites at the same time, so capital is being stretched thin and therefore makes additional capital increases or procurement measures likely.

A number of forecasts have already had to be conceded, just as many an order has been canceled and some orders were not able to be collected in the end. Even the recently received orders for three electrolysis plants in Europe (among others, for a steelworks in Bremen with Apex Energy) does not change the overall picture. In the case of various strategic acquisitions, a certain period of integration is required before a positive contribution margin can be achieved.

In addition, Plug’s relationship with companies like Walmart and Amazon, for whom it retrofits forklifts, is still too one-sided. But this is a temporary negative for me, as Plug is also supplying the liquid hydrogen here and will probably continue sale until the time it can produce the hydrogen itself and earn real money from it. I think – not claim – that it’s the two big customers Amazon and Walmart that could have hedged their very high book profits with the exercise of over 100 million stock warrants through the short sale of shares, since Plug’s short interest lies at over 100 million shares. This combination of customer relationship simultaneously mixed with incentives through warrants for Plug shares raises some questions, including about the tax handling, as Plug continually records charges based on the fair value movement of the warrants on the quarterly financial reports.

Summary

Still not a buy. Alternatives are offered by companies or company shares like Bloom Energy, as their outlooks are clearer and more predictably implemented. Until Plug delivers figures that correspond to expectations could be a while still. Many other forecasts that have been given up on substantiate my critical stance. My forecast that the stock market value of Plug could match that of Bloom is coming increasingly into visibility: Plug was valued at over 15 billion USD and now around 5 billion USD, while Bloom from over 4 billion USD has also slid deeper to a 2.7 billion USD valuation, but in view of the expected figures, has the chance, based on the revenue multiple and the forecasted turnover of 1.5 billion USD in 2023, to become higher valuated than Plug. Meanwhile, Plug expects a 2023 turnover of 1.2 to 1.4 billion USD. It’s a bet.

Disclaimer
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, June 9th, 2023

Iveco and Nikola end European joint venture

Iveco and Nikola end European joint venture

Iveco is exiting the joint venture it set up with Nikola in Europe. Prior to this was a partnership since 2019 that led to the development of the battery-electric Tre BEV and the hydrogen-powered Tre FCEV. Iveco is taking over 100 percent of the European business of Nikola, and is paying for it with 35 million USD, on the one hand, and giving back 20 million shares in Nikola, in addition. After the transaction, Iveco will still have a participation of 5 million shares, which considering the over 600 million shares, is rather symbolic in character.

What consequences does the separation have?

Advertisements

Both companies want to continue working together. IP is to further be jointly used, and Iveco will also continue to supply vehicle parts to Nikola. That otherwise the two companies are now parting ways and concentrating on their respective originating markets – Iveco on Europe and Nikola on the USA – is actually sensible, since the main thing for Nikola now is the ramp-up of the hydrogen-powered truck Tre FCEV, which is scheduled to hit the US market in the second half of 2023. This also involves the ramp-up of the entire hydrogen complex, starting with the company’s own hydrogen production and ending with the distribution network, where comprehensive subsidy programs (up to 320,000 USD per truck in the USA as well as 3 USD per kg green hydrogen) are waving.

For Nikola, this step by Iveco is not to be valued negatively. On the contrary: Iveco is concentrating on battery-electric trucks for the time being and can use Nikola’s development in hydrogen and fuel technology for itself, is my analysis. Think about the exit of Daimler and Toyota from Tesla = after the sale of their share packages, the real price explosion in Tesla stock occurred.

Regardless of the planning, Iveco, in my opinion, will however in the future be a potential distribution partner, including in Europe, for Nikola, if Nikola produces the FCEV in large series and the topic of hydrogen in the commercial vehicle sector really gains speed in Europe. But that will still be a few years away, as Nikola has sufficient potential in the USA if you consider that no more diesel trucks can drive in California after 2035 and, much earlier in certain fields of application such as port facilities, only emissions-free commercial vehicles may be allowed. California represents an economic potential that matches that of Germany. For Nikola, this is an advantageous setup.

Great growth potential Nikola sees in neighboring Canada. To the Canadian commercial vehicle association Alberta Motor Transport Association (AMTA), one battery-electric and one hydrogen-power truck each will be supplied, along with the electric charging station and hydrogen via mobile H2 refueling stations. Nikola can approach potential customers in Canada this way, as brand awareness will increase with these pilot units.

In many respects, this will be a very exciting, future-indicating fiscal year for Nikola. Today will lay the basis for tomorrow, and, for me, in a positive sense. Nikola CEO Michael Lohscheller said: “I want to let you know one thing: Nikola is a real deal. We have real trucks that are being ordered, delivered and operating and customer fleets now. We have world class software and technology and elegant zero emissions products, decarbonizing the high polluting commercial transportation market.”

Construction of the Hydrogen Hub in Phoenix, Buckeye has now received approval – the decision was received a few days ago. In this is the expectation that Fortescue Future Industries will participate. In parallel, Nikola has closed an agreement with infrastructure investor Voltera Power (subsidiary of venture financier EQT), which wants to invest over 1 billion USD in infrastructure for electric power and hydrogen, according to which Voltera Power will finance 50 jointly operated service stations (hydrogen and electric charging stations) until 2026 and Nikola will take care of the hydrogen supply.

The brand HYLA under Nikola, which is responsible for the production and sale of hydrogen, is thus receiving a very important boost, especially since Nikola sees its main source of revenue and profit margin in hydrogen. Along with Chart Industries, Nikola is additionally working on mobile hydrogen refueling stations of the latest generation that enable highly versatile delivery and storage of hydrogen for truck fleets.

By the end of June, six out of a planned ten gamma Tre FCEV units will be in use with test customers. AJR Trucking, who primarily makes hauls for the United States Postal Service, has already placed an order for 50 Tre FCEVs. Think like a visionary: What happens if Nikola attains its sales targets of 1,000 to 1,600 trucks in 2024 and a doubling by 2025 and achieves the transition to the profit zone by the end of 2024?

Unmeaningful quarterly figures

In the first quarter of this year, Nikola attained a turnover of 11.1 million USD. The loss for the quarter amounted to 169.1 million USD, or minus 0.31 USD per share. However, this figure also includes stock compensation costs, whereas the non-GAAP loss was 143.6 million USD. The loss is ascribed high spending on research and development and of course on building production capacities for the truck.

The cash burn (capital spending rate) will reach 150 million USD per quarter (in 2022, this was still over 220 million USD/quarter) and should sink in the course of the year to 125 million USD. In equity, Nikola still has available 796 million USD in total, taking into account also the potential sale of further shares on the stock exchange via the ATM program.

For the full year, the company is targeting a turnover of around 150 million USD. The fourth quarter will be the basis for this, as in this one, the first large numbers of the Tre FCEV will be delivered.

At the right time with the right product in the right market

You should always ask yourself: Is the business model of Nikola maintainable in the future? It’s a clear yes. Do the expectations and forecasts match the plans, and are they realistic and feasible? Clear yes. Nikola is a first mover in its market, and that is the most difficult phase for any company. Needed for the coming months, however, is a certain perseverance. That Nikola is not building more of the battery-electric truck Tre BEV at this time is only logical, as they will sell the first lot out and then adjust production to the specific order situation.

It is the liquidity that must be maintained until the hydrogen-powered trucks go into series production and become a real sales driver. That will, in my view, not really be visible until the fourth quarter of this year. Until then, Nikola must reduce costs and focus financially on the most important things.

The annual stockholder meeting was moved from the 6th of July to the 7th, to obtain a sufficient number of votes to, via authorized capital, raise the number of shares to 1.6 billion. If this does is not achieved on July 7, then a simple majority vote by shareholders in August will suffice. This approval is majorly in the interest of the shareholders, as it would enable an additional avenue for capital to flow in. What could always happen – in the positive sense – independently of this is the approval of the 1.3 billion USD heavy credit from the US Department of Energy under the Inflation Reduction Act. In my view, this would clear up – in the case of approval – the whole financial situation at Nikola, as then they would probably – no guarantees – no longer have to place shares at knockdown prices and in the interest of short sellers.

Nikola has received a notice from Nasdaq that it needs to take measures to maintain its stock exchange listing, as share prices of under 1 USD could lead to a delisting. Nikola has time to do this until November. CEO Lohscheller asserted in the fireside chat that Nikola will soon be fully “in compliance” again. There were rumors that Nikola needs to do a reverse stock split, so a share consolidation, in order to force the share price back over 1 USD. This is, however, not very likely, especially since a lot is possible until November that could move the share price back up.

Partners of Nikola such as the Australian Fortescue Future Industries, as well as other players in the commercial vehicle market, could use the opportunity to themselves buy cheaply in Nikola and promote its hydrogen business model this way. And some (large) orders for the trucks at any time is also conceivable and would have psychological significance, especially since comprehensive subsidies have only been possible since April (up to 320,000 USD for FC trucks). Every day, any of this can happen.

Summary: You need strong nerves, but the risk-reward ratio is correspondingly very high. Stay tuned and don’t be shaken. Short sellers should gradually think about their stockpiles – so far, they’ve been dominating the daily stock occurrences, but that too will come to an end when Nikola delivers what it predicts.

Disclaimer

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, June 9th, 2023