Advancements in battery technology and a rapid growth in battery electric vehicles (BEVs) caused interest in hydrogen fuel cell electric vehicles (FCEVs) to dwindle. However, supply chain challenges relating to key battery materials and metals have once again highlighted that BEVs and FCEVs are not competing but complimentary in helping the world move away from fossil fuels.
The use of hydrogen is especially promising in the heavy-duty truck segment where batteries haven't proved to be very effective so far. Both Nikola (NKLA -3.26%) and Hyzon Motors (HYZN 0.94%) operate in this market segment. Let's discuss which of the two electric truck makers looks better right now.
What differentiates Hyzon Motors from Nikola
Nikola makes both fuel cell and battery electric trucks. It began production of its saleable battery electric truck, Tre BEV, on March 21. On the other hand, production of its fuel cell truck, Tre FCEV, is expected to begin in the second half of 2023.
Image source: Nikola.
By comparison, Hyzon Motors offers only fuel cell trucks. The company already delivered 87 FCEVs, including heavy- and medium-duty trucks, in 2021. Hyzon will be providing its first demonstration trucks to trial customers in North America in 2022. It currently sells trucks in Asia, Australia, and Europe.
Hyzon Motors expects to deliver 300 to 400 vehicles in 2022. Similarly, Nikola expects to deliver 300 to 500 Tre BEV trucks in 2022. So, even though Nikola's deliveries are yet to begin, the two companies could be selling roughly same number of vehicles this year.
Japan, Germany, China, and South Korea are among the leading countries advancing use of hydrogen fuel cells. Hyundai Motor and Toyota are among the top automakers offering fuel cell electric cars. High electricity cost in Europe is a key contributing factor behind higher interest in hydrogen fuel cell vehicles there compared to the U.S.
Growth prospects
Higher costs than competing technologies, as well as an absence of refueling infrastructure, are among the key factors restricting the growth of fuel cell vehicles. As Nikola offers both fuel cell and battery electric trucks, it has a bigger addressable market. This could be especially beneficial should demand for fuel cell trucks fail to grow as expected. However, Nikola faces competition from the likes of Tesla, Daimler, Volvo, BYD, Peterbilt, Volvo, and Hyliion, all of which offer, or plan to offer, electric trucks.
Image source: Hyzon Motors.
In comparison, Hyzon Motors is a focused player in the fuel cell trucking segment. That allows the company to concentrate its resources and efforts on improving its offerings. Another plus for Hyzon Motors is its international operations, especially in geographies that are focusing efforts in advancing hydrogen use.
Nikola is expanding its Coolidge manufacturing facility in Arizona, which it is expected to complete by the end of this quarter. It will have a capacity of 2,500 units per year. After that, the company plans to begin the next phase of expansion that will increase the plant's capacity to 20,000 trucks per year.
By comparison, Hyzon Motors follows an asset-light approach. It intends to just manufacture fuel cell power train in-house, while procuring parts from various suppliers and assemble them. The company is manufacturing two facilities in the U.S. Its Bolingbrook facility in Illinois will start producing fuel cell systems by the end of 2022. Its Rochester facility will provide vehicle sub assembly. Hyzon intends to establish dedicated facilities once its vehicle demand reaches a level that supports them.
Which electric truck stock is better?
While both Nikola and Hyzon Motors are into electric truck manufacturing, both companies differ in terms of their offerings, growth approach, and target geographies. Nikola offers both battery and fuel cell trucks and has its own production facilities. On the other hand, Hyzon Motors is selling only fuel cell trucks and sources most parts, other than fuel cell systems, from different suppliers.
If you are looking to invest in a hydrogen fuel cell truck maker, Nikola doesn't fit the bill precisely. Its fuel cell trucks are still in the alpha testing stage, while the company also offers battery electric trucks. By comparison, Hyzon Motors' hydrogen trucks are already in use. The company has a deep expertise in hydrogen fuel cell technology coming from parent Horizon Fuel Cell Technologies. Horizon has by now delivered hundreds of hydrogen fuel-cell systems for commercial vehicles, including class 8 trucks.
Overall, Hyzon Motors' focus on fuel cell trucks, its expertise, actual deliveries, and an asset-light approach make it look better than Nikola right now. For some, Nikola's past troubles could be an added reason, but the company seems to have clearly moved past them.
