are teaming up in an unusual deal to advance the hydrogen economy.
On Thursday, the companies announced they will buy products from each other.
(Ticker: NKLA) makes battery- and hydrogen-powered semi-trucks and has an energy solutions division; Power Plug (PLUG) develops hydrogen-fuel cell systems that replace conventional engines and even batteries.
Plug will buy 75 of Nikola’s Tre trucks powered by fuel cells that use hydrogen gas to generate electricity. Nikola will purchase 30 metric tons of Plug’s daily hydrogen liquification systems for the large-scale hydrogen production and dispensing plant that it is building in Arizona. Systems of that size, at some point, can produce enough fuel to power a feet of a few hundred heavy-duty trucks.
Nikola also agreed to buy at least 100 metric tons a day of green hydrogen from Plus, with the option to buy more over time. Unlike hydrogen gas, green hydrogen is produced without carbon dioxide emissions. Climate change is mainly attributed to carbon dioxide emissions.
“Nikola and Plug share a common vision for sustainable, efficient, energy solutions which supports our commitment to decarbonize the transportation industry,” Carey Mendes, Nikola’s president of energy, said in a statement. “This strategic relationship will help underpin Nikola’s ambitious growth plans to expand the hydrogen energy business and to support the adoption of Nikola’s zero-emission Class 8 truck.”
Plug and Nikola both want hydrogen technology adopted quickly, but they also are rivals. Nikola plans to operate what are essentially hydrogen-based gas stations. And Plug has plans to make heavy-duty vehicles.
Nikola told Barron’s that the partnership is no shift in strategic direction; Plug didn’t immediately respond to a request for comment.
In midday trading, Nikola stock was down 0.2% and Plug shares were off 3.4%. The
Dow Jones Industrial Average
were down 2.5% and 2.3%, respectively.
Nikola and Plug shares are down 79% and 46% this year. Both companies were big winners in the government’s Inflation Reduction Act, which will provide subsidies for hydrogen technology. But neither company is profitable yet and investors have been focusing more on profits in 2022 and interest rates have risen.
Write to Al Root at email@example.com