What happened

Now that the final version of the Inflation Reduction Act (IRA) has been signed into law, investors have had some time to determine what companies might be the beneficiaries and which might lose out. Today, gains in shares of Nikola (NKLA -3.26%), Lordstown (RIDE 5.71%), and Hyzon Motors (HYZN 0.94%) show these companies could benefit from the legislation. As of 11:45 a.m. ET, Nikola and Hyzon shares are 3.2% and 13.1% higher, respectively. At the same time, Lordstown stock is 0.5% higher after an earlier gain of nearly 7%. 

So what

The surge in these shares this morning comes after a report from Barron's noting that companies working to promote hydrogen fuel for transportation have been under-recognized as beneficiaries of the clean energy portion of the IRA. Nikola and Hyzon could be in the sweet spot to exploit those investments. 

Now what

Many investors in the renewable energy sector have focused on electric vehicle manufacturers and consumers that could benefit from tax incentives provided in the bill. There are some limitations to which vehicles and consumers will qualify, and that's where much of the discussion has been. But the IRA also supports hydrogen infrastructure. Both Nikola and Hyzon are trying to grow a market for hydrogen-fueled heavy trucks.

Nikola believes the total market for hydrogen-fuel-cell-powered electric vehicles is more than $360 billion. Nikola first developed its battery electric trucks, and has already delivered more than 50 such vehicles. At the same time, it has also announced plans for hydrogen dispensing stations and other infrastructure to advance and scale its long-term hydrogen distribution network while its hydrogen fuel cell trucks are in pilot testing. 

Hyzon shares have been pummeled by investors recently, with the stock down more than 50% in just the last several weeks. That came after the company said it would delay its quarterly report after it discovered "operational inefficiencies" at its European joint venture facility. It also subsequently appointed a new CEO. 

That drop helps explain the oversized bump in shares today. If the company gets back on track with its hydrogen truck business, it, and Nikola, could benefit greatly from the IRA credits. The act said hydrogen produced from renewable sources can qualify for a credit worth up to $3 per kilogram, according to Barron's. This would significantly change the cost structure for hydrogen use in transportation. 

Each of these vehicle makers still needs to execute its production plans, and there remain many different risks that could prevent that from happening. But after the stocks have dropped so much this year, the potential good news associated with IRA subsidies has them popping some today.