Nikola expects Inflation Reduction Act to lower hydrogen, truck costs
According to Nikola Corp (NKLA.O), the recent inflation reduction act (IRA) will be an added advantage for the electric vehicle maker as it will facilitate the business of making hydrogen fuel cells for its electric trucks and for its hydrogen transportation business.
The act, which was signed into law by United States Vice-President Joe Biden in August, provides incentives that are designed to make it easier for U.S. manufacturers of batteries and electric vehicles to attract more investment.
Nikola, who is based in Phoenix, Arizona, reported on Monday that the legislation would help Nikola’s semi-trucks be competitive on a total cost of ownership basis against diesel-powered semi-trucks, the company said in a statement.
The Nikola Group has announced that it plans to build up to 60 hydrogen-dispensing stations by 2026, which will allow the company access to up to 300 tons of low-carbon hydrogen in order to fuel its production capabilities.
The IRA’s tax credits and incentives would lower the cost of hydrogen, dispensing infrastructure and Nikola’s trucks, the company said, adding that it would create more jobs.
Companies that produce hydrogen will also receive up to $3 per kilogram of the fuel for the first five years.
Nikola Energy President Carey Mendes told Reuters, “I think it is important to pass on the benefits of lower prices to the customer. They will benefit, volumes will increase, and that will lead to more business.”
In order to sell fuel-cell trucks, Nikola aims to create dispensing stations in close proximity to customer locations, in order to bundle hydrogen fuel into the fuel-cell truck. “We try to give them a guarantee in both aspects, the price as well as the supply (of hydrogen).” Mendes continued.
Nikola also added that a $40,000 tax credit may also reduce the upfront cost of Nikola’s Tre battery-powered and fuel cell-powered trucks, which may also be beneficial to fleets that are replacing diesel trucks or starting new fleets.
As part of its acquisition of battery manufacturer Romeo Power last week, the company also announced that if it decides to produce its own battery modules for its trucks, it will receive a $10 per kilowatt hour benefit.
Source: Reuters
Prachi, an accomplished Chief-Editor at The Sustainable Brands Journal, has 15+ years of experience in Europe, the Middle East, and India, managing 90+ global sustainable brands. She’s a prolific writer in sustainability, contributing to various publications. Prachi’s unwavering passion and expertise make her a recognized authority, driving positive change and inspiring a sustainable future.
