- The Inflation Reduction Act (IRA) is expected to provide a
significant boost to Nikola's low carbon hydrogen energy business
strategy, enabling lower cost hydrogen supply and dispensing
infrastructure
- Nikola's energy business aims to develop access of up to 300
metric-tons of low carbon hydrogen supply and up to 60 hydrogen
dispensing stations by 2026
- The IRA energy and other climate incentives are anticipated to
lower costs across Nikola's expected portfolio creating greater
value for Nikola's integrated business model
- The IRA's incentives for energy and zero-emissions truck
manufacturing businesses are expected to further enable Nikola's
zero-emission trucks to be competitive on a total cost of ownership
basis when compared to traditional diesel vehicles
PHOENIX, Oct. 20,
2022 /PRNewswire/ -- Nikola Corporation (Nasdaq:
NKLA), a global leader in zero-emissions transportation and energy
supply and infrastructure solutions, today issued the following
statement highlighting key elements of the Inflation Reduction Act
(IRA), signed into law by President Biden this past August. The
legislation supports every aspect of Nikola's integrated truck and
energy business model from the development of zero-emissions
vehicle technology through and including low-cost hydrogen
production and dispensing infrastructure deployment.
"The energy and climate investments included in the IRA are
anticipated to help accelerate our strategic initiatives and drive
new growth opportunities," said Michael Lohscheller, President,
Nikola Corporation. "Given the
expected scale of our hydrogen business model, and our early mover
advantage, we believe Nikola is ideally positioned to benefit from
nearly every aspect of the legislation at a scale ahead of current
industry participants. The Act is expected to provide significant
benefits to Nikola through production and investment tax credits,
direct pay provisions, and other incentives that are expected to
lower the cost of hydrogen, dispensing infrastructure and trucks
for Nikola and our customers. The legislation is projected to
enable Nikola and our strategic partners to create more jobs, play
a key role in the transition to a low carbon economy, and build
on our leadership position in zero-emission
transportation."
Significantly Enhances Nikola's
Integrated Business Through Lower Costs
Nikola's energy business model supports the needs of truck
customers who require low carbon hydrogen supply and dispensing
stations to support the adoption of fuel cell electric vehicle
(FCEV) fleets. The IRA, when combined with other state-based
incentives, such as the California Low Carbon Fuel Standard (LCFS),
will reduce the overall cost of hydrogen production and dispensing.
The required scale of hydrogen supply and dispensing infrastructure
for the heavy-duty sector does not yet exist, and Nikola
believes the IRA will help support its development activities as
the Company and its partners take a leading role in building this
critical infrastructure – enabling more sales of zero-emission
vehicles (ZEVs) and creating additional value to Nikola's future
energy business.
Scaled Clean Hydrogen
Production
- Nikola and its strategic partners are working to build a
large-scale hydrogen supply and dispensing infrastructure business
to support Nikola's truck customers, as well as third-party demand.
Specifically, this business aims to develop access of up to 300
metric-tons per day of hydrogen supply and up to 60 hydrogen
dispensing stations by 2026, with significant growth plans over the
decade. Several of these infrastructure projects are actively
underway, including a hydrogen production hub in Arizona, which will be engineered to produce
30 metric-tons per day in its first phase, and will scale up to 150
metric-tons per day upon completion, which will help to support
adoption of Nikola's trucks and hydrogen demand in regional markets
including California. Nikola has
made progress in advancing the development of this hub and have
recently acquired a land parcel in Buckeye County, Arizona on which the hub will be located. With
the land now secured, the permitting and rezoning process, as well
as the procurement of long-lead equipment, has begun. This hub,
when completed, will allow Nikola to supply its dispensing
infrastructure in regional markets, including California
- Wabash Valley Resources (WVR) in Indiana is designed to produce over 250
metric-tons of low-carbon hydrogen per day, once built, of which
Nikola has a 20% ownership interest. Hydrogen produced at the WVR
facility is expected to ensure that Nikola will be able to supply
the Midwest region with approximately 50 metric-tons of hydrogen
per day.
- These and several other hydrogen production and infrastructure
projects planned across the country are expected to benefit from
the incentives provided by the IRA, including the following IRA
Clean Energy Production, Investment and Carbon Management Tax
Credits:
-
- The Clean Hydrogen Production Tax Credit (45V) provides
up to $3.00 per kilogram of hydrogen
produced. The tax credit is a direct pay source of revenue for the
first five years of a facility's production.
- The Carbon Sequestration Credit (45Q) has been extended
and expanded and provides up to $85
per metric-ton of carbon, which equals up to $1.00 per kilogram, that is captured and
sequestered. This benefit adds a financial incentive to Nikola's
planned hydrogen supply projects that will use advanced
technologies, such as those being implemented by WVR, to capture
carbon.
- The extension of existing energy Investment Tax Credits
(48) promotes the development of renewable electricity projects
that provide zero-carbon electricity used in the production of
hydrogen via electrolysis.
- The addition of a technology neutral energy Investment Tax
Credit (48D) will benefit various critical parts of the
hydrogen manufacturing process, including hydrogen storage, by up
to 30% of the eligible investment.
Accelerates Deployment of a
Commercial Hydrogen Fueling Network and Commercial Hydrogen
Vehicles
Nikola has begun to implement its hydrogen dispensing station
development program in California
and announced three station locations in August 2022. Additional stations across the U.S.
are in progress and are expected to be announced in the near
future. These projects are anticipated to benefit Nikola through
the application of the IRA's incentives for hydrogen supply and
dispensing station infrastructure development.
IRA Alternative Fuel Infrastructure Tax Credits
- The Alternative Fuel Refueling Property Credit
(30C) supports Nikola's plans to build with its partners up
to 60 dispensing stations by 2026. This provision promotes station
development by offsetting the cost of construction for up to
$100,000 per dispensing equipment
item. When considered against the cost of a station, this could
provide a significant reduction in cost.
- The IRA benefits for dispensing infrastructure, when combined
with state hydrogen dispensing incentive programs such as
California's Low Carbon Fuel
Standard (LCFS), will allow low carbon hydrogen to earn an
additional $1.00 - $2.00 per kilogram of hydrogen dispensed into a
Nikola Tre FCEV, depending on the market-based demand for an LCFS
credit. With LCFS, the price of hydrogen becomes significantly more
cost competitive compared to costly diesel prices in the state.
Oregon and British Columbia have enacted similar
programs, and Canada (federally)
and Washington will begin programs
in 2023 and 2024, respectively, making these areas key targets as
first movers to adopt the technology.
Advances Nikola's Manufacturing
Capabilities and Broadens Customer Base
Nikola's vehicle and components production is expected to
benefit from provisions of the IRA that will reduce the cost of
vehicle manufacturing and accelerate customer acquisition.
- The expansion of Nikola's Coolidge manufacturing facility may benefit
from an up to 30% Advanced Energy Project Credit (48C)
through a $10 billion grant for
advanced energy projects that expand manufacturing facilities for
the production of heavy-duty battery-electric vehicles (BEVs) and
FCEVs.
- Nikola may benefit $10 per
kilowatt hour from the Advanced Manufacturing Production Credit
(45X) for producing battery modules for BEVs and FCEVs, in the
event Nikola produces battery modules in-house.
- Additionally, the new $40,000
Commercial Clean Vehicle Credit (45W) may reduce the upfront
purchase cost of a Nikola Tre BEV or FCEV vehicle for fleets
looking to transition from carbon-emitting Class 8 diesel
engines.
Together, these incentives are expected to provide value across
Nikola's integrated truck and energy business model by driving down
the production costs of low carbon hydrogen, reducing
infrastructure costs for the construction of hydrogen dispensing
stations, and reducing the cost of ownership of a Nikola FCEV to be
competitive on a total cost of ownership basis with traditional
diesel vehicles.
About Nikola Corporation
Nikola Corporation is globally transforming the transportation
industry. As a designer and manufacturer of zero-emission
battery-electric and hydrogen-electric vehicles, electric vehicle
drivetrains, vehicle components, energy storage systems, and
hydrogen station infrastructure, Nikola is driven to revolutionize
the economic and environmental impact of commerce as we know it
today. Founded in 2015, Nikola Corporation is headquartered in
Phoenix, Arizona. For more
information, visit www.nikolamotor.com or Twitter @nikolamotor.
Forward-Looking
Statement
Certain statements included in this press release that are not
historical facts are forward-looking statements. Forward-looking
statements generally are accompanied by words such as "believe,"
"may," "will," "estimate," "continue," "anticipate," "intend,"
"expect," "should," "would," "plan," "predict," "potential,"
"seem," "seek," "future," "outlook," and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding the
anticipated benefits of the IRA to Nikola's business. These
statements are based on various assumptions, whether or not
identified in this press release, and on the current expectations
of Nikola's management. We cannot assure you that forward-looking
statements will be achieved and forward-looking statements are not
predictions of actual performance. Forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements, including
but not limited to, the failure to realize the anticipated benefits
of the IRA; design and manufacturing changes, challenges and
delays; economic, financial, legal, supply chain, regulatory,
political and business conditions and changes in domestic and
foreign markets; the potential challenges arising from COVID-19;
the outcome of legal, regulatory and judicial proceedings to which
Nikola is, or may become a party; demand for and customer
acceptance of Nikola's trucks; risks associated with development
and testing of fuel cell power modules and hydrogen storage
systems; risks related to the rollout of Nikola's business and the
timing of expected business milestones, including delivery of
trucks for sale; the effects of competition on Nikola's future
business; the availability of capital; risks associated with
changes in accounting treatment or accounting standards; and the
other risks detailed from time to time in Nikola's reports filed
with the Securities and Exchange Commission, including its
quarterly report on Form 10-Q for the quarter ended June 30, 2022 and other documents Nikola files
with the SEC. If any of these risks materialize or our assumptions
prove incorrect, actual results could differ materially from the
results implied by these forward-looking statements. These
forward-looking statements speak only as of the date hereof and
Nikola specifically disclaims any obligation to update these
forward-looking statements.
INVESTOR INQUIRIES:
investors@nikolamotor.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/nikola-highlights-benefits-to-integrated-truck-and-energy-business-model-from-the-inflation-reduction-act-301654800.html
SOURCE Nikola Corporation