This will be for Nikola's Arizona hydrogen hub. Secondly, Nikola awarded Plug Power the contract for one 30 TPD hydrogen liquefaction system. Under the agreement, there is an expectation that 125 TPD in volume will be contracted by December 2026 and 80% of that will be under a take-or-pay contract. The volumes will ramp up to 125 tons per day ("TPD") as the company's production network for green hydrogen ramps up and more of it comes online. What will the new collaboration with Nikola mean for Plug Power?įirstly, Plug Power and Nikola announced that they have entered into a green hydrogen supply agreement where Plug Power will, from 1 January 2023, supply green hydrogen to Nikola. At that point in time, there was no reference to which one of the class 8 truck companies that Plug Power might work with, but the management did mention that a partnership was more likely.įast forward 6 months, later, this collaboration with Nikola was announced and this was really in the making since then. This announcement is significant, in my view, in part due to management having mentioned in the past that as part of its vertical integration strategy, class 8 trucks were one of the new key markets it was looking to accelerate growth in. Recently on 15 December 2022, Plug Power announced that it was entering a collaboration with Nikola ( NKLA) on green hydrogen, liquefaction and fuel cell electric vehicles ("FCEVs"). I wrote an article about Plug Power's Plug Symposium after attending it, which can be found here, as well as other earlier articles, which can be found here. This is further illustrated in the article below as the collaboration between Plug Power and Nikola continues to demonstrate Plug Power's strong competitive positioning. The company's vertical integration strategy is starting to bring additional advantages as customers see the strong value add that Plug Power can bring across the entire hydrogen ecosystem. Specifically for Plug Power, it has a strong revenue growth potential as it looks to meet its mid- and longer-term revenue targets. I reiterate my investment case for Plug Power and continue to see Plug Power being a key beneficiary from the opportunities coming from the strong tailwinds of increasing adoption of and utilization levels of the hydrogen economy. While Plug Power ( NASDAQ: PLUG) has continued to struggle in this market environment given that it is still currently an unprofitable company, I think that the fundamentals continue to look good for Plug Power.
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