Kim Dong-gwan's Discovery of the 'Second Tesla' Sees Equity Value Increase Sevenfold in One and a Half Years (Comprehensive)

[Asia Economy Reporters Sohyeon Park, Yoonju Hwang] Hanwha Group achieved a more than sevenfold increase in the value of its stake through a preemptive investment in Nikola, a U.S. hydrogen truck company dubbed the "second Tesla." Nikola was discovered as an investment opportunity by Kim Dong-kwan, Vice President of Hanwha Solutions, securing a foothold for future global hydrogen business expansion.

According to Hanwha Group on the 8th, Hanwha Energy and Hanwha Total Petrochemical made a preemptive investment of a total of $100 million in Nikola in 2018. On the first day of listing, the 4th (local time), Nikola closed trading at $33.75 on the U.S. Nasdaq market. Based on the closing price that day, the company's valuation reached $12.2 billion.

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

Nikola, in which Hanwha made a preemptive investment, is a startup founded in 2015 by founder Milton. In 2018 and 2019, Nikola received early investments from Hanwha, Germany's Bosch, and Italy's CNH Industrial (manufacturer of Iveco trucks), developing hydrogen trucks (FCEV) capable of traveling 1,200 miles (approximately 1,920 km) on a single hydrogen charge, as well as 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.

Within the group, this success is interpreted as the result of the foresight of Kim Dong-kwan, Vice President of Hanwha Solutions. The connection with Nikola dates back to early 2018. A 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 renewable energy business in North America, and Hanwha Total Petrochemical, which was pursuing new eco-friendly convergence businesses overseas, agreed to jointly invest in Nikola.

This decision was based on the judgment that the long-term growth directions of these two affiliates 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. During this process, Kim Dong-kwan, then Executive Director of Sales at Hanwha Q CELLS (now Vice President of Hanwha Solutions), who had accumulated extensive knowledge of renewable energy over more than ten years in the solar business, reportedly played a significant role.

Following Nikola's listing, major Hanwha affiliates are actively considering entering the U.S. hydrogen ecosystem market. Hanwha Energy holds the right to prioritize supplying electricity generated from solar power to Nikola's hydrogen refueling stations. Hanwha Total Petrochemical has secured the operation rights for hydrogen refueling stations. In this process, Hanwha Q CELLS can 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. A Hanwha official stated, "We have laid the foundation to enter the hydrogen ecosystem market by maximizing the capabilities of Hanwha affiliates," adding, "We will establish ourselves as a leading eco-friendly renewable energy company encompassing not only solar power but also hydrogen to actively respond to climate change."

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