Itâ€™s going to take a few years to know if Nikolaâ€™s plan to clean up trucking with zero-emission semis powered by hydrogen works, but the Arizona startupâ€™s Nasdaq NDAQ debut is a high-profile bet that the elemental fuel can finally crack the transportation market. It also turned company founder Trevor Milton into a multibillionaire.Â
Shares of Phoenix-based Nikola ended at $33.75, down less than 1% after earlier rising as much as 5%. That put the companyâ€™s market cap at about $12 billion, based on approximately 360 million shares outstanding. Milton is the biggest shareholder, with a stake worth about $3.7 billion at the close on Thursday, according to a Forbes estimateâ€“more three times an initial estimate in 2019.Â
Interest in the company has been rising in recent months, and not just from investors ahead of the Nasdaq listing, Milton says. â€śWe’re now talking with almost every major OEM in the world,â€ť he tells Forbes. In part, thatâ€™s due to the addition of Steve Girsky, a former vice chairman of General Motors GM , to Nikolaâ€™s board. (Rather than an IPO, Nikolaâ€™s speedy Nasdaq listing resulted from its reverse merger with Girskyâ€™s publicly traded VectoIQ that was completed on June 2.)
â€śItâ€™s interesting, the groups that have been more open to working with us are ones youâ€™d probably not expect,â€ť he said, hinting that announcements may be coming in the weeks ahead. Currently, Nikola is partnered with European commercial vehicle maker CNH / Iveco to build battery-electric versions of its trucks for that market starting in 2021. Itâ€™s also working with Bosch, Meritor and several other manufacturers specializing in the commercial vehicle space.Â
Nikola has secured truck orders worth $10 billion from companies led by Anheuser-Busch, which wants 800 of the companyâ€™s non-polluting behemoths. So far, Nikola hasnâ€™t generated much revenue but estimates sales will jump from $150 million in 2021 to $3.2 billion by 2024 as it ramps up productions. In 2024, it expects to sell or lease 7,000 battery-powered units and 5,000 hydrogen fuel cell trucks, according to its filing.
While the company has yet to deliver trucks to commercial customers, thereâ€™s been a steady uptick in interest in hydrogen for heavy-duty trucks, particularly long-haul vehicles, as fuel cell power systems are much lighter than batteries and can be refueled about as fast as diesel and gasoline models. Along with Iveco, Bosch and Meritor, Nikola also counts South Korean solar panel maker Hanwha and Norwayâ€™s Nel as key industrial partners that helping get it sci-fi-styled semis on the road and fueled up.
Â (For more on Nikola and Trevor Milton, seeÂ â€śBehind New Billionaire Trevor Miltonâ€™s $3 Billion Push To Make America Run On Hydrogenâ€ťÂ from the September 30, 2019 issue ofÂ ForbesÂ magazine.)
Like Elon Muskâ€™s Tesla TSLA , Nikola plans to build and operate fuel stations to support its vehicles. This week it announced plans to buy $30 million of equipment from Nel to help it produce 40,000 kilograms of hydrogen a day from water and renewable electricity.Â
Fuel cell technology, which makes electricity in a chemical reaction involving hydrogen and oxygen with only water vapor as a byproduct, has been around since the 1960s, but earlier iterations were far too costly and not durable enough for heavy daily use. Thatâ€™s changed dramatically in the past decade, with costs for the materials and fuel tanks dropping steadily as the technology matured. While industrial hydrogen is typically sourced from natural gas, new methods for generating â€śgreenâ€ť hydrogen from water and electricity from solar or wind farms have made the fuel much more compelling to environmental regulators in California, Europe, Japan, South Korea and China.
And while Nikolaâ€™s hydrogen truck and fuel plans are the most ambitious, it faces competition in the space from big players including Hyundai Motor and Toyota Motor Corp. Toyota has been testing hydrogen fuel cell trucks at the Port of Los Angeles for years and Hyundai this week opened South Koreaâ€™s first hydrogen fuel station for commercial vehicles.