Nikola Invests $50M in Clean Hydrogen Push

Zero-emissions transportation and infrastructure solutions provider Nikola Corp. (NKLA) is investing $50 million in Wabash Valley Resources for a 20% stake in the clean hydrogen project under development in West Terre Haute, Ind.

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The hydrogen project will utilize solid waste byproducts to produce clean and sustainable hydrogen for transport fuel and baseload electricity generation, while simultaneously achieving permanent underground sequestration of captured CO2. Significantly, upon completion, it is expected to be one of the biggest carbon capture and clean hydrogen projects in the U.S.

The move is expected to help the transition to clean fuels for trucks in the Midwest. It gives Nikola a hydrogen hub that can cater to future supply stations in a 300-mile radius. The company plans to set up hydrogen fuel supply stations across Indiana and the broader Midwest.

Pablo Koziner, President, Energy, and Commercial at Nikola, said, “The Wabash solution can generate electricity as well as hydrogen transportation fuel, which should provide the flexibility to support future truck sales and hydrogen station rollout in the region.” (See Nikola stock chart on TipRanks)

Furthermore, upon completion in 2024, the project is expected to produce up to 336 tons per day of hydrogen, which can generate 285 megawatts of electricity.

Last month, BTIG analyst Gregory Lewis initiated coverage on the stock with a Buy rating and an $18 price target (4% upside potential).

Lewis thinks Nikola’s truck models (named Tre and Two) can potentially disrupt the long-haul truck market, which could result in long-term success for the company. Production of Tre is expected to begin in 2023.

Consensus on the Street is a Moderate Buy based on 2 Buys and 4 Holds. The average Nikola analyst price target of $16.40 implies a 5.3% downside potential. Shares have gained 43.1%% over the past month.