Hanwha Secures Foothold for Hydrogen Business Entry... Considering Entry into US Hydrogen Market

Nikolai Invested in 2018, Increasing Possibility of Joining Hydrogen Truck Business
Vice President Kim Dong-gwan Plays Key Role in Nikolai Investment

[Asia Economy Reporter Hwang Yoon-joo] Hanwha Group has secured a foothold for entering the hydrogen business through the Nasdaq listing of Nikola, a U.S. hydrogen truck company. This is because Hanwha Energy and Hanwha TotalEnergies, which made a preemptive investment of $100 million in 2018, are increasingly likely to join Nikola's hydrogen truck business, whose success potential was recognized through the listing. The value of Hanwha's stake in Nikola amounts to $750 million after the listing.

◆ Preemptive investment in Nikola in 2018... Stake value increased more than sevenfold = Nikola closed at $33.75 on the Nasdaq market on the first day of listing, the 4th (local time). Based on the closing price that day, the company's valuation reached $12.2 billion. Prior to this, on the 2nd, Nikola received approval for a merger plan with VectoIQ, a Nasdaq-listed investment company in the transportation and energy sectors, at a shareholders' meeting.

With Nikola's entry into Nasdaq, the value of the Nikola shares held by Hanwha Energy and Hanwha TotalEnergies increased to $750 million. The two companies jointly invested about $50 million each, totaling $100 million, in November 2018, holding a 6.13% stake in the merged entity. This means the value of their holdings increased more than sevenfold in just one and a half years since the investment.

Hanwha's relationship with Nikola dates back to early 2018. The local venture investment team responsible for discovering promising U.S. startups prepared a report emphasizing the need to invest in Nikola.

After discussions among affiliates, Hanwha Energy, which was considering expanding its renewable energy business in North America, and Hanwha TotalEnergies, which was pursuing new eco-friendly convergence businesses overseas, agreed to jointly invest in Nikola. Among several affiliates, these two were judged to have long-term growth directions aligned with Nikola's business model.

However, to make the final investment decision, it was crucial to gather information about Nikola and expert opinions on the hydrogen business outlook. In this process, Kim Dong-kwan, Executive Vice President of Sales at Hanwha Q CELLS (currently Vice President at Hanwha Solutions), who had accumulated extensive knowledge of renewable energy over more than ten years in the solar business, played a significant role. He not only gathered information through a close network of experts in the U.S. but also met directly with founder Trevor Milton (39) alongside the working-level team to confirm that Nikola's business vision aiming for 'zero greenhouse gas emissions' aligned with Hanwha's future business direction. Vice President Kim and Milton continue to communicate regularly.

Hanwha's major affiliates are actively considering entering the U.S. hydrogen ecosystem market following Nikola's listing. Hanwha Energy holds the right to prioritize supplying electricity generated by solar power to Nikola's hydrogen refueling stations. Hanwha TotalEnergies has secured the operation rights for hydrogen refueling stations. In this process, Hanwha Q CELLS could supply solar modules to hydrogen refueling stations, and Hanwha Solutions' Advanced Materials division is expected to have opportunities to supply tanks for hydrogen refueling stations and hydrogen tanks for trucks.

◆ Nikola's corporate value at $12.2 billion... Evaluated as the 'Second Tesla' = Nikola, in which Hanwha made a preemptive investment, is a startup founded in 2015 by founder Milton. In 2018 and 2019, Nikola received initial investments from Hanwha, Germany's Bosch, and Italy's CNH Industrial (manufacturer of Iveco trucks), developing hydrogen fuel cell trucks (FCEV) capable of traveling 1,200 miles (about 1,920 km) on a single hydrogen charge and electric battery trucks (BEV) targeting Europe.

Nikola is headquartered in Phoenix, Arizona, and is currently building a state-of-the-art manufacturing plant in Coolidge near Phoenix. Starting next year, Nikola plans to enter the U.S. and European truck markets through electric battery vehicle sales and aims to mass-produce hydrogen trucks as early as 2023. Nikola stated, "We have already received pre-orders for more than 14,000 hydrogen trucks worth over $10 billion."

Besides manufacturing hydrogen trucks, Nikola plans to engage in hydrogen-based logistics by establishing hydrogen refueling stations. It has already secured logistics clients using hydrogen trucks, including Anheuser-Busch InBev, a global beer company producing Budweiser. To this end, Nikola has set a goal to build about 800 hydrogen refueling stations across the U.S. and Canada by 2027. Ultimately, Nikola's ambition is to completely transform global logistics infrastructure with hydrogen energy-based autonomous trucks.

The name Nikola is derived from Nikola Tesla, the electrical engineer who fought the current war against Thomas Edison in the late 19th century. While Tesla, founded by Elon Musk, is a leading figure in electric passenger cars, Nikola is regarded as the 'Second Tesla' in the hydrogen truck sector.

This content was produced with the assistance of AI translation services.