Truck maker Nikola (NASDAQ:NKLA) said late Tuesday that it has finalized a deal to receive affordable electricity needed to produce hydrogen for the company's planned fueling network.
The company said it has secured a rate schedule with Arizona Public Service, a unit of utility holding company Pinnacle West Capital (NYSE:PNW), that Nikola says "makes possible the accelerated development of hydrogen-based fueling solutions for the transportation industry."
Nikola went public last year amid much fanfare with a plan to build electric-powertrain trucks, with an eventual focus on fuel cells. The company intends to bundle the cost of hydrogen fuel and maintenance in leasing deals for its trucks, and is seeking to build a network of 700 fueling stations across North America.
The company had initially been in talks to partner with BP to source the energy needed to make hydrogen, but those discussions broke down in September after a short-seller raised questions about Nikola's business prospects. Founder and former executive chairman Trevor Milton left Nikola in September, and management has been scrambling to rebuild the business plan in the months since.
CEO Mark Russell had hoped to announce a hydrogen-infrastructure partner by year's end, but warned that the announcement could slip into January. There were media reports in December linking Nikola to Arizona Public Service, but any deal between the two was subject to the approval of Arizona regulators.
In the statement issued Tuesday, Russell said, "The approval of this special rate for hydrogen production is critical for advancing the future of zero-emissions transportation and building a hydrogen economy."
Nikola still has a long road to travel, but investors can at least breathe a sigh of relief now that this important partnership is finalized.