Hydrogen fuel cell systems have significant advantages over established technical solutions for both motive and stationary applications. They are set apart particularly by their qualities of zero-emission operation, long life and high achievable efficiencies. However, their relatively high purchase price often deters potential users. To reduce costs, bipolar plates intended for mass-production are to be designed with as little material as possible. Thanks to an innovative cooling concept, applications can be made not only less expensive but also smaller and lighter.
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Reducing the installation space increases the power density of the system and raises the heat flow density. This creates huge challenges when it comes to efficiently controlling the temperature of fuel cell systems. In addition to established air and liquid cooling solutions, cooling that occurs through the change in the coolant’s state is an approach that shows much promise. By purposefully configuring the geometric surface properties of bipolar plates, greater amounts of heat can be dissipated while also enabling a targeted adjustment of the temperature distribution along the bipolar plate. The HZwo:FRAME joint project entitled “Innovative cooling systems for fuel cells” has successfully managed to develop a cooling concept based on the phase transition of a coolant and to demonstrate its function on a laboratory scale.
Greater heat transfer needed
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Effective and precise control of temperature is vital for the efficient operation of a fuel cell system. Commercially available fuel cell stacks currently offer two cooling methods: air cooling and liquid cooling [1].
Air cooling is characterized principally by its simplicity of design. The technical complexity is much lower compared with liquid-based cooling systems since no other elements are required aside from a fan. Its possible uses are limited chiefly by the relatively small quantity of heat that can be dissipated. Furthermore, air-cooled systems commonly lead to highly uneven temperature distribution within the fuel cells which can negatively affect their efficiency and long-term stability. Most stacks with a power output of under 5 kilowatts are actively air-cooled, for example in stationary applications.
Liquid cooling has established itself as the prevalent form of temperature control in fuel cell stacks with a total electrical output of more than 5 kilowatts, for instance in vehicles. In liquid-cooled fuel cell systems, the coolant is pumped around a circuit through special cooling channels which are integrated into the fuel cells. The heat that is absorbed here must then be transferred back to the environment in a downstream heat exchanger.
Current developments are increasingly focused on thin metal bipolar plates as this type of plate lends itself to future mass production at favorable cost. At the same time, the power density of fuel cells can be increased, thus opening up new application areas and creating possibilities for miniaturizing fuel cell systems. Given this shift in development, the aforementioned conventional cooling solutions, based on convection alone, will be insufficient in future to dissipate the necessary amount of heat via the surface areas that remain.
Two-phase cooling (also referred to as evaporative cooling) makes it possible to reach the high heat flow densities required, i.e., the flow of thermal energy relative to the unit area and cooling time for miniaturized fuel cells. This cooling process exploits the effect whereby a large amount of energy – the latent heat of evaporation – is needed when the coolant changes into a gaseous state. This energy is extracted from the fuel cell during the phase transition on the surface of the bipolar plates, thus helping significantly to cool the fuel cell. Since this powerful cooling concept relies on low volume flows of coolant, the output required from the necessary peripheral equipment, such as pumps, can be reduced considerably when compared with air or liquid cooling [2].
Laser cutting
The research was motivated particularly by the huge potential that evaporative cooling offers in terms of the efficient heat management of fuel cell systems. Here, the attention was focused on metal bipolar plates since they are a key functional element in the fuel cell. As part of the development process, design concepts for the new cooling method had to be devised and implemented, such as the simulation-based calculation of optimized coolant flow or the design of durable gaskets. In the end, it was decided to produce the metal bipolar plates from a 100-micron-thick initial sheet using forming techniques and to then modify the plates to meet the requirements of the new cooling concept.
One project objective was to achieve a homogeneous temperature distribution on the bipolar plate. To reach this goal, a suitable surface functionalization was chosen as the method for influencing the heat transfer coefficient. This technique was applied by introducing microstructures in the form of single-pulse laser cuts using laser beam machining. The effect of these kinds of microstructures is, firstly, to enlarge the real surface area of the bipolar plate and, secondly, to increase the number of nucleation sites for bubble formation during the phase transition.
In connection with this, the microstructure density (number of microstructures per unit area), because of its relevance as a design parameter, was investigated by varying the spatial gap between the individual pulse cuts. Abb. 1 shows the results of microstructuring the test pieces at different pulse gaps of between 5 microns and 35 microns.
Proven at lab level
A laboratory testing area was developed and set up to examine the heat transfer of the modified bipolar plates (see fig. 2). The test fixture was designed so that the technical conditions would correspond to those of a real-world application and could be altered within a range of realistic load variations. A transparent process chamber and a bipolar plate envelop the cooling channels, thus enabling visual identification of flow and boiling processes occurring in the coolant. In addition, three shielded thermocouples were positioned centrally in the direction of flow and spaced evenly across the bipolar plate. These were used to measure the temperature distribution in the coolant.
Fig. 2: Test fixture: process chamber with integrated bipolar plate and temperature sensors
The experiments used different types of plate, including a stamped reference bipolar plate and a laser-structured, coated bipolar plate. The microstructure density was varied depending on the direction and length of flow in order to achieve the most even temperature distribution possible along the direction of flow.
Fig. 3: Structured bipolar plate with microstructure density reducing in the flow direction (left); detailed view of wave structure (center); detailed view of microstructuring (right)
The test fixture was used to run experiments to demonstrate and investigate the influence of surface functionalization on phase transition behavior. Here, the boiling processes on the structured surface were less distinctive than on the unstructured reference plate (see fig. 4). In addition, the measurements using the temperature sensors confirmed that the maximum temperatures arising could be lowered through surface functionalization of the bipolar plate. What is more, the temperature distribution along the direction of coolant flow was much more even: The temperature ∆T along the structured and coated plate was lower for all parameter sets examined in comparison with the reference bipolar plate.
Fig. 4: Results of the visual examination: intensity of bubble movement (dark-blue areas) in the flow field of the reference plate (top) and the structured and coated plate (bottom) for the process parameters (incoming coolant temperature and heat flow density of the bipolar plate): 78 °C and 0.5 W/cm2 (left); 78 °C and 2 W/cm2 (right)
It was thus possible to prove that the thermodynamic properties of bipolar plates, particularly in the evaporation zones, can be influenced and modified through microstructuring. The project’s findings represent a further step toward achieving fuel cell stacks that are both cost-effective and space-efficient.
About the project
The project gathered essential and relevant knowledge for the design and technical realization of a fuel cell stack with metal bipolar plates based on the evaporation principle. The work was validated under realistic conditions. The following project partners worked in cooperation to achieve the project objectives: WätaS, Fischer Werkzeugbau, CeWOTec, the Department of Micromanufacturing Technology and the Department of Advanced Powertrains at TU Chemnitz.
Funding and project management: European Regional Development Fund (EFRE) / Sächsische Aufbaubank (SAB)
Reference(s) [1] A. Fly and R. H. Thring, A comparison of evaporative and liquid cooling methods for fuel cell vehicles, Int. J. Hydrogen Energy, vol. 41, no. 32, pp. 14217–14229, 2016, ISBN: 0360-3199, ISSN: 03603199, DOI:10.1016/j.ijhydene.2016.06.089 [2] G. Zhang and S. G. Kandlikar, A critical review of cooling techniques in proton exchange membrane fuel cell stacks, Int. J. Hydrogen Energy, vol. 37, no. 3, pp. 2412–2429, Feb. 2012, ISSN: 03603199, DOI:10.1016/j.ijhydene.2011.11.010
Authors:
Igor Danilov, M. Sc, igor.danilov@mb.tu-chemnitz.de
Dipl.-Ing. (FH) Ingo Schaarschmidt, M. Sc, ingo.schaarschmidt@mb.tu-chemnitz.de
Dr.-Ing. Philipp Steinert, philipp.steinert@mb.tu-chemnitz.de
Doubling the distance with a fuel cell range extender
An electric moped with a 150-kilometer (90-mile) range that refuels in under a minute? With a fuel cell and hydrogen tank acting as a range extender, it is feasibly possible. Confirmation of this can be found in a joint study entitled “Pocket Rocket H2” that has been undertaken by DHBW university and SOL Motors in Böblingen, Germany.
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Electric bikes and e-scooters have already become part of the urban landscape. Now mopeds are edging into electric propulsion. In fall this year, the eye-catching Pocket Rocket from startup SOL Motors is being launched on the market.
The battery electric model is available in two versions with maximum speeds of 45 km/h (28 mph) or 80 km/h (50 mph). In both cases, the range is between 50 and 80 kilometers (30 and 50 miles) and it takes around three hours for the battery to recharge from a domestic socket. This is usually entirely sufficient for riding the Pocket Rocket on the daily commute to work.
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Nevertheless, there are also circumstances where a rider will want to recharge rapidly and travel further. For example, the use of mopeds can be envisaged in disaster response situations where a greater range will be needed along with continuous availability. Conditions that can be met by a fuel cell vehicle.
Electric vehicles: battery or fuel cell?
At the moment, the vast majority of electric vehicles around the world, from e-scooters to light commercial vehicles, are powered by batteries. A fuel cell only comes into play if higher power outputs and large amounts of energy are demanded. Typical examples are heavy-duty vehicles, trains, ships or airplanes. Because the hydrogen tank and the fuel cell are separate, this means that the amount of energy and the power output are decoupled in a fuel cell power system. This gives a higher degree of freedom in terms of the system layout, including for smaller vehicles.
A fuel cell power system cannot dispense with a battery completely since it is needed for starting the system and for regeneration. There are various ways to configure the battery in combination with the fuel cell: If the entire driving power is provided by the battery, the fuel cell acts only as a range extender. Almost the reverse of this would be the option whereby propulsion would be provided purely by the fuel cell and a small starter battery would be used that can temporarily store the braking energy. If both power sources work together, this is called hybrid operation.
Consequently, the Pocket Rocket H2 project focused initially on the issue of configuration since comparable vehicles are not (yet) on the market. The starting point for calculations was the test cycle defined in the Worldwide Harmonised Light Vehicle Test Procedure or WLTP which, together with the vehicle data for the Pocket Rocket (version with maximum 45 km/h), supplies the power and energy from fig. 2. As a result, the decision was made to opt for a fuel cell as a range extender.
Fig. 2: Calculated power and energy requirement of the Pocket Rocket (version with max. 45 km/h) from the WLTP test cycle
Benefits of a fuel cell range extender
When a fuel cell is used as a range extender, its purpose is merely to recharge the battery. Therefore very little has to be done to the battery electric vehicle’s control system. In its capacity as a range extender, the fuel cell only has to supply a power output of up to 1,000 watts; peak loads are covered by the battery. The range, meanwhile, is limited only by the size of the hydrogen tank. For fuel cells in the performance class up to 1,000 watts, simple air cooling is sufficient; from around 2.5 kilowatts upward, a more complex water cooling system is needed. As a range extender, the fuel cell can be operated at constant power while also protecting the battery from exhaustive discharge. Both factors increase the life of these components.
The only disadvantage of the chosen configuration is that the battery has to be large enough to ensure several kilometers can be covered with a power output over 1,000 watts, e.g. for mountain driving.
Demonstrator in the lab
As part of the project, the system comprising the battery and fuel cell range extender was set up as a lab prototype. For this purpose, a proton exchange membrane or PEM fuel cell system from Hydrogen Air Technologies was used (see fig. 3).
Fig. 3: Compact fuel cell system with a 1,000-watt continuous output. The fans for air cooling can be seen in the right of the picture. The hose between the fans is used for nitrogen purging.
The system with its 65 cells is air-cooled by means of simple, speed-controlled fans and supplies the described maximum electrical output of 1,000 watts. The voltage varies, depending on the output level, between 65 volts (idling) and 35 volts (maximum power). The setup is known as a dead-end system, in other words only the amount of hydrogen that will be consumed is supplied.
In the dead-end system, nitrogen accumulates relatively quickly on the hydrogen side (anode) due to diffusion. This nitrogen must then be released via a purging valve. Purging lowers the efficiency of the system as it also carries away unused hydrogen. The fuel cell system under investigation has an efficiency of around 35 percent at 1,000 watts. Converted into hydrogen consumption, this is equivalent to 85 grams of hydrogen an hour.
Electrical connection
The use of the fuel cell system as a range extender results in an extremely simple electrical connection. As illustrated in fig. 4, a DC-DC converter has to adjust the output voltage of the fuel cell to the end-of-charge voltage of the battery. The battery can then be continuously charged at a constant voltage. The fuel cell controller adjusts its output power to the prevailing charging current. The powertrain control unit remains unaffected by the charging carried out by the fuel cell.
Fig. 4: Connection of electrical components of the fuel cell when used as a range extender
Thanks to the fuel cell system, the battery can be reduced from 2.5 kilowatt-hours to 0.35 kilowatt-hours while retaining the same motor output. In principle, the range can then only be limited by the tank volume, in other words the quantity of hydrogen in the tank. The power requirement ascertained by the WLTP test cycle produces, together with the system efficiency, a hydrogen consumption of approximately 200 grams for 100 kilometers (60 miles). This means that the fuel cell version of the Pocket Rocket could travel a distance of 500 kilometers (300 miles) on 1 kilogram of hydrogen!
Concern about pressurized hydrogen tanks
Unfortunately, the storage of hydrogen for motive applications is still unsatisfactory. Hydrogen is around 14 times lighter than air. It therefore has to be compressed in order to store the gas in significant quantities. But even at a pressure of 700 bar, 1 kilogram of hydrogen takes up a volume of almost 40 liters. In addition, a pressurized tank of 700 bar, which stores 1 kilogram of hydrogen, weighs about 24 kilograms. This makes it even more remarkable that the Pocket Rocket H2 is only around 2 kilograms heavier than the battery electric vehicle – and has twice the range.
By reducing the battery from 2.5 kilowatt-hours to 0.35 kilowatt-hours, its weight decreases from roughly 14 kilograms to just around 2 kilograms. In total this works out at around 16 kilograms which is spread across the fuel cell (4 kg), tank (9 kg), battery (2 kg) and other components (1 kg) such as the DC-DC chopper and connectors. The pressurized hydrogen tank is not only the largest component; it is also the heaviest. This is principally due to the high safety requirements for use in road transportation.
These days, high-pressure tanks for hydrogen consist of a polymer liner wrapped in carbon fibers that have been impregnated with epoxy resin. The carbon-fiber layer is several centimeters thick to ensure the desired requirements are met, for instance a burst pressure of 2.35 times the working pressure. Thus only round or cylindrical tanks can be produced for manufacturing reasons. To house the tank on the frame of the Pocket Rocket, more flexible tank geometries would be desirable, though these would exceed all budgets at this point in time.
In the final part of the project, options for housing the components of the range extender on the frame of the Pocket Rocket were explored in a CAD model (see fig. 5).
Fig. 5: Research into the arrangement of individual components of the fuel cell range extender on the frame of the Pocket Rocket H2. The pressurized hydrogen tanks take up the most space.
The battery, which in the battery electric model is located in the upper cross tube, is now much smaller and could migrate into one of the V tubes. In this version, hydrogen would be stored in two tanks, both in the cross tube and in a separate tank. Admittedly, the upper tank on its own would be capable of storing almost all the 350 grams of hydrogen needed to double the range. The second tank would only be used if the hydrogen is to be stored at “only” 350 bar. It should also be noted that refueling 6 kilograms of hydrogen takes four minutes for cars. Refilling the Pocket Rocket H2 would take around 14 seconds.
Conclusion and outlook
The Pocket Rocket H2 project was able to demonstrate how the range of a moped can be doubled through using a fuel cell and a hydrogen tank. Instead of long charging times, the “hydrogen moped” can be refueled in an extremely short amount of time. What is surprising is that it is still possible to reduce the overall weight of the fuel cell Pocket Rocket despite the relatively heavy hydrogen tank because a smaller size of battery is used. In the end, only a minimal adjustment was needed to the control system to facilitate the electrical connection in the range extender version. This makes it particularly suitable for “retrofitting” in battery electric vehicles. At the DHBW’s Horb campus, the project findings have already been translated into the design of delivery drones with fuel cell power systems.
In a follow-up project, the lab setup and the Pocket Rocket will be merged into a true hydrogen moped. The Pocket Rocket H2 project received funding as part of the InnovationChallenge 2021 run by the state of Baden-Württemberg’s ministry for science, research and the arts.
ICM’s innovation contest
The InnovationCampus Future Mobility, which is a joint initiative of Karlsruhe Institute of Technology and the University of Stuttgart, is increasing its involvement with industry through the launch of its first InnovationChallenge Mobility and Production. In November 2021, the quick and straightforward funding format for explorative innovation projects brought together the worlds of industry and academia with the aim of jointly solving seven research questions in the fields of mobility and production. The challenges came from innovation-focused companies while the possible solutions were provided by participating universities. The funding, meanwhile, was awarded in the form of small and compact grants by the InnovationCampus. The new funding format is specially designed for small businesses: In the 2021 tendering round, consortiums of businesses and research organizations received more than EUR 900,000 in support.
Author: Prof. Dr. Volker P. Schulz, Kai Tornow, Prof. Wolf Burger, Manuel Messmer
That happened fast: From 0.60 USD to over 3.70 USD in a few weeks and then the bounce back under 1.50 USD – triggered by the abrupt departure of Michael Lohscheller as CEO and president. The outlook, though, cannot be better, even if not everything is following a straight line – certainly the case at the stock exchange and in the share price. But Nikola Motors is a startup, and that contains some risk and some rough paths in the still young company history. In detail:
The news hit like a bomb: CEO Lohscheller is going back to Europe and is ending his career at Nikola – immediately operationally, but he will remain as a consultant during the transition until the end of September. Lohscheller gave as reason for his departure an illness in the family. He achieved great things for Nikola in a difficult environment and positioned the company well during its early days. His successor, Steve Girsky, is no stranger, though. For quite some time – since the beginning and IPO – he has had a management function at Nikola, most recently as chairman. Earlier, he brought Lohscheller in to join him at Opel and later likewise at Nikola. At GM, he was on the board and was in charge of the company turnaround at the time. In answer to an analyst’s question whether he was only taking a transitional role as Nikola CEO, Girsky said, in essence: He’s here to stay.
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Another personnel issue is weighing on the company: The president of energy responsible for the Hyla brand has left the company – reasons unknown. Here too, however, a solution should quickly be found.
Prior to this was the vote on increasing the authorized share capital from 800 million to 1.6 billion shares, which was decided in favor at the annual shareholders meeting on August 4, 2023. A simple majority was finally enough after the change in legislation (before, a majority of all outstanding shares was required). Once again, Nikola has the power to generate new company capital via issuance of shares – through ATM (at-the-market) transactions but also placement with institutional or even strategic investors or through convertible bonds.
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An existing ATM program with Citicorp worth 600 million USD was extended on August 4, 2023. Nikola still needs, according to its own predictions, a good 600 million USD in order for the company to be positioned in the next two years to enter the profit zone. Which is forecasted for year 2025 (cashflow positive).
Cost-cutting programs take effect
Very positive was the notice from the company that they are on track to reduce their capital requirement per quarter to 100 million USD by the end of 2023. Currently, the liquidity outflow (cash burn) lies at about 150 million USD in a quarter. In 2022, it was even over 240 million USD per quarter. All this shows that Nikola has correctly done its homework and is well positioned until it is in full swing. Goal: Sustainable breakeven with high sales growth.
Sales of 1,000 to 2,000 hydrogen-powered trucks are necessary to move into the black, was a take from the press conference on financial results (transcript). So far, they already have 200 Tre FCEV units across 18 customers in the books. That many such orders are coming can be safely assumed; after all, Nikola is the first to offer these trucks in large number. Remember: California is giving a subsidy in the amount of 288,000 USD per FC truck on top of the 40,000 USD via the Inflation Reduction Act from the US federal government. Additionally, the hydrogen is subsidized if it is green (regeneratively produced): 3 USD per kg, with an additional 2 USD per kg in California.
As a hydrogen-powered truck from Nikola costs 400,000 USD (the Tre BEV costs 324,000 USD before subsidies), this should get many shippers to buy, since it is heavy transport of long hauls that really needs to be decarbonized and there are many restrictions (emissions laws, restrictions up to and including the ban on diesel vehicle sales by 2035 in many places) creating pressure to convert truck fleets – to battery-electric and/or hydrogen-powered via fuel cell or hydrogen engine (the last exists but not yet in series production).
On top of this, remember that through the scaling of Tre FCEV production, the production costs per unit will drop significantly or, in other words, the profit margin will be increased. Currently, the cost of materials alone per vehicle is 275,000 USD. This will, however, come out to be more favorable with increased scaling. Now, there are ten gamma trucks that have been produced (for test trials with customers). The first Tre FCEVs will find delivery in September. Until the year’s end, 100 Tre FCEV units are targeted and additionally, of the already produced Tre BEV units, 100 to 150 could find buyers by the end of the year.
In the third quarter, the number of units should be 60 to 90 and bring a net turnover of 18 to 28 million USD (after deduction of the dealer discount). Currently, there are 139 on company premises and 92 at dealerships. Nikola will not continue producing these until the start of 2024, and even then only after each order placement – produce to order.
Anheuser-Busch as trump card?
With the beer giant Anheuser-Busch, Nikola has had a long cooperation – since 2018. Anheuser has prepared itself via LoI (letter of intent) to buy 800 Tre FCEVs. So far, a few Tre FCEVs have already been driving with Biagi Brothers, a company that transports goods on behalf of Anheuser, and have clocked over 12,000 miles (19,000 km) without a hitch. Will a solid order come out of this? The probability is very high, as so far Anheuser has shown no signs of turning its back on Nikola. With such an order, 1,000 FC trucks would then immediately be in the books. Battery-electric trucks for Anheuser will come from BYD (50 units) and sometime also 40 Semis from Tesla.
What’s certain: The focus is clearly on hydrogen-powered trucks, as money is earned with this – especially with hydrogen – 60,000 to 80,000 USD has been calculated as the average amount of hydrogen per vehicle per year in terms of dollars. And here Nikola is a first mover, where there is already a line of competitors with battery-electric models on the market.
Michael Lohscheller said regarding this: “Nikola is the real deal…. We think we are the best position company to lead the commercial zero emission transition and accelerate the hydrogen economy.” Nikola will offer various purchasing options for the Tre FCEV, since some customers prefer to acquire the truck based on a lease deal and would like to see the hydrogen directly included via a flat rate. Anything is possible.
News in the past weeks
Two programs at once to promote H2 infrastructure in California can be made use of by Nikola. For eight H2 refueling stations, there are subsidies of over 58 million USD. This should be valuated very positively, as Nikola has already concluded an agreement with Voltera (subsidiary of investment fund group EQT) for the construction of 60 stations over the coming years and will get further support through their subsidization.
An order for 13 e-trucks (10 battery-electric and 3 hydrogen-powered) from J.B. Hunt was able to be gained. This company operates its own extensive fleet, but also provides freight shipment and logistics services for over 1 million trucks in the USA. That looks like a springboard for much more.
Battery supplier Proterra under bankruptcy protection
A credit due of over 170 million USD has prompted battery supplier Proterra to seek Chapter 11 bankruptcy protection. The aim was to gain enough time to make use of the still available liquidity of over 60 million USD, as the said credit could be frozen via Chapter 11 if the court decides that. Battery production is continuing, however, so Nikola (but also Daimler Truck) can expect to be further supplied, although Nikola could very well also use LG as another supplier. With Proterra, however, shareholders will now be left empty-handed should a recapitalization take place. The holders of the bonds could become shareholders if equity (shares) come out of the liabilities.
Problems with battery-electric trucks
Weeks ago, two battery-electric vehicles on the company premises caught on fire, the cause of which was confirmed as a defect with the coolant. Nikola has addressed this and announced a recall of the about 209 Tre BEVs. In addition, the recommendation was made to have a way to remotely monitor the trucks at all times and to not park them in halls. The problem has been recognized and will be fixed, is the impression from the investigations. On top of this was the report that Nikola will not reach the sales target of 350 to 500 Tre BEVs in 2023. More important, though, are the Tre FCEVs, whose sales have just started.
Liquidity situation eases noticeably
If you add up all the possible forms of financing and liquidity procurement, Nikola has, as per the start of July, 743 million USD in potential. Included in this is, among other things, the funding commitment from Tummin that still amounts to over 200 million USD and can be used by Nikola at its own discretion (issuance of shares as countervalue). The liquidity base amounted to 295.4 million USD at the end of the second quarter (see above). Contained in this is the gain from the deal with Iveco of 26.5 million USD and the sale of land (sale & lease back) from the company grounds in Coolidge, Arizona for 49 million USD.
The revenue from sale of the planned hydrogen production facility in Buckeye to Fortescue Future Industries in the amount of 20.7 million USD is included in the total liquidity in July, but not in the figure as per June 30, 2023, so Nikola then has 316.1 million USD in cash available. This should be sufficient for the time being, although further shares can be issued at any time ATM (at the market), as Nikola now theoretically has up to 800 million shares for issue.
From the press conference, it can be gathered that this option will now be used with less less pressure and fewer conditions. Essentially, new shares will not be placed at just any price – but it will really be up to the bank to decide how this ATM program is implemented. In any case, it will be a very important event if Nikola receives inflows of 100 to 300 million USD through the ATM program and is thus fully financed. The stock exchange will value this – if it occurs – very positively.
Convertible bond of 325 million USD
Nikola is issuing a convertible bond with a nominal value of 325 million USD and a coupon in the amount of five percent. Large investors in particular like to invest in such securities, especially when as in this case with Nikola they’re also green bonds. Since the bonds can be converted into shares, the holder receives in addition to the return, the added potential of gains in the share price, while the holder receives the original capital back at the end of the period if conversion does not take place. For Nikola, this will yield the possibility of being able to settle such debts through shares (own capital), if the share price develops favorably.
Summary
The shares of Nikola will remain very volatile, especially since short-sellers have a great interest in depressing the share price and using any further negative-seeming news for their own advantage. As per the end of July, 138.5 million shares have been sold short – over 23 percent of the free float. At the same time, the company will become more and more attractive the more the two truck variants find buyers and the infrastructure (charging stations and H2 refueling stations – mobile or with fixed location) is developed as well as the required hydrogen generated (from outside or in-house production).
Nikola is a frontrunner in its market and in my opinion has the potential to become a kind of Tesla for trucks. The continuous increase of this stock in portfolios through institutional investors demonstrates the confidence in the company. Time is needed, as real growth will only really take off in the next two to three years. Equal to consider is that the stock exchange is an anticipation mechanism that allows future developments (expectations) to flow in long before their concrete appearance in the price development.
In the further course of year 2023, I expect a price range between 1.50 and 4 USD, but already 5 to 10 in 2024, and 15 to 20 in 2025. Particularly the order influx for the Tre FCEV will drive the share price already in the short term, as the sales and earnings potential can be derived on this basis.
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.
The past few months have been extreme for Hyzon Motors, but all figures for the past two years since the IPO had to be reprocessed because of the accounting debacle, in order to comply with accounting guidelines and the conditions for listing on the stock exchange (quoted share price needed to be above 1 USD again, all quarterly reports available, deadlines met). All this has now been accomplished and there is clarity. In addition, the board of directors was newly formed and expanded to include experienced professionals.
The stock market has translated this – as I predicted – in the form of rising share prices, which involved a rapid increase from about 0.50 USD to just over 2 USD (company value rose from 150 to over 400 million USD). Recently, a marked decline in the price occurred again, which however in view of the company prospects should be transitory in nature.
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To the figures: At the end of the second quarter, cash and cash equivalents still amounted to 172.4 million USD. The loss for the quarter in the amount of 60.2 million USD contains the high legal costs in connection with the SEC investigations and the necessary legal measures, for which 32 million USD was recorded and 28.5 million USD of that can be regarded as non-recurring.
The capital requirement per month is estimated at 9 to 12 million USD, with between 73 and 81 million USD of capital expected to be put to use in the second half of the year, and then in total 110 to 120 million USD in 2024. So the company is still well financed, but will surely have to raise capital in the course of 2024 (issuance of shares, loans, subsidies under the Inflation Act, etc.) or seek other forms of financing (convertible bond, participation by a strategic partner). Still unclear, however, is what the costs for the final report from the Securities and Exchange Commission for Hyzon will come to in year 2024.
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Matthew Foulston new board member
Matthew Foulston has over thirty years of experience mainly in the automotive industry and there especially in the heavy haul industry. Among other things, he was CFO at Navistar Truck and CFO of Mazda North America as well as in top positions at Ford Motor. Hyzon will certainly have made a good choice in this regard that serves the company’s goals.
In addition, on August 24, 2023, current board member Erik Anderson was elected Chairman of the Board of Directors. Anderson succeeds George Gu, who stepped down from his position.
200‑kW fuel cell has reached milestone
The site in Rochester, New York will be closed down or sold to reduce costs. The 200‑kW stack that was developed in the production facilities and the corporate-owned research center in Bolingbrook, Illinois, on the other hand, is in test series and on the road. The start of production there and commercialization can therefore begin in 2024. In parallel, the fully automated production of the MEA (membrane electrode assembly) was set up. Now it’s on to the product design and acceptability. Another 16 prototypes are still to go through testing.
The 200‑kW stack (single stack) has many advantages compared to the competition, according to the press release on it, regarding the size, weight, range (more km per kg hydrogen), but also the price (25 percent lower). In addition, the service requirement is lower. Ten trucks have already been equipped for test runs with these 200‑kW stacks, three of them in Europe and seven in Australia. All very good news.
A global market of 68 million diesel-powered trucks can be retrofitted with such and thus contribute to decarbonization. The Inflation Reduction Act would come into play here to, as 60 million USD have been made available for processes for the reduction of diesel emissions, another 2 billion USD for related production facilities on US soil, another 3 billion USD for technologies that help technologically improve motor vehicle production, etc. Hyzon will surely be named some figures, as they expect subsidies out of these for themselves, since they’ve classified themselves as a “technology innovator.”
A good sign: The short sellers are stocking up. Over 20 million shares were still sold short a few months ago, so this number has fallen to under 13 million. After prices around 2 USD, it went back down, to 1.20 USD, although this could be seen as a reaction to the rise from 0.50 USD to 2 USD (profit taking, technical reaction). The current prices around 1.20 USD invite considerations again of buying.
Hyzon, likewise to Nikola and Ballard, is engaged in exactly the right market – the fuel cell in the commercial vehicle segment. Some orders in 2024 will drive the share price of Hyzon in the positive direction. Also the participation of a strategic investor is conceivable at any time. Hyzon is thinking about pursuing partnerships like that with Fontaine Modification (system integrator in USA) in others regions as well, like with partners present in Europe.
Tests with 110‑ and 120‑kW modules
Hyzon Motors also is transitionally positioning itself with its 110‑kW and 120‑kW modules. Already 15 test trials of FC trucks with customers (Performance Food, Airgas, Bison Transport, Talke, Total Transportation Services, MPREIS, Hylane and lastly Seaboard Transport) were able to be successfully completed. They were tested under extreme weather conditions and in all conceivable daily operations. Over 2,900 hours of continuous use of the FC systems and over 68,000 miles (110,000 km)in distance were clocked in the process. This test program is underway in Europe and the USA and is to be extended to Australia – with customer Remondis. The number of employees is to remain at around 380.
Partnership with Fontaine Modification
Hyzon builds, in contrast to Nikola Motors, no truck chassis of its own, but supplies the complete fuel cell module. The installation is carried out by companies such as Fontaine Modification from the USA as a system integrator for Hyzon. After all, Fontaine alone converts over 44,000 trucks for customers every year. With it, Hyzon has the perfect partner.
Fontaine Modification belongs to the holding company Marmon Holdings, which has a stake in over 100 companies from, among others, shipping and logistics, machine building and medical technology, with an annual turnover of 10 billion USD. Marmon Holdings in turn belongs to the investment portfolio of billionaire Warren Buffett, Berkshire Hathaway. For me, this can be used to justify the speculation that Marmon could make a stake in Hyzon in order to use the FC knowhow (patents, products) in-house for subsidiaries like Fontaine.
So you can well imagine that Hyzon is going with FC modules a way similar to Ballard Power with Ford Trucks or Nikola with Bosch, but could also become part of a larger strategic whole. Fontaine/Marmon could be this, but also companies like Cummins or automotive suppliers such as Dana or Magna could be considered. Or truck producers who themselves would like to have the FC powertrain in house, but have “slept through” the development. So Hyzon is becoming highly interesting, in addition to the growth prospects around the FC stacks, as an acquisition speculation.
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.
Increasing demand for hydrogen technologies is prompting the need for automakers and equipment suppliers to align and adapt production capacities to meet new requirements. To enable this to happen, it is essential to establish expertise and develop processes and technologies, particularly when it comes to key technology areas like hydrogen production and consumption systems, since gaining a global competitive advantage in the longer term is dependent on the ability to manufacture these systems economically . That’s why the H2SkaProMo joint project is seeking to develop assembly systems for manual, semiautomatic and fully automated production of fuel cell stacks that are readily scalable in terms of their level of automation. (more…)
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