Nikola Corp. was in advanced talks withBP Plc on partnership to build hydrogen filling stations shortly before short sellerThe report raised allegations about the credibility and capabilities of the startup, according to people familiar with the matter.
The companies had an agreement in principle to collaborate on the hydrogen fuel network project, which would underpin Nikola’s plan to lease fuel cell trucks, the people said, asking not to be identified while discussing the private information.
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Nikola was hoping to announce the deal with the oil major just days after anotherpartnership withGeneral Motors Co. to make a battery-powered pickup truck, one of the people said. Representatives for BP and Nikola declined to comment.
Nikola shares fell nearly 20% on Wednesday. They were down 19% to $ 22.96 by 2:21 p.m. in New York City – well below its price after their IPO in June through a reverse merger.
Investors were sometimes confused by Nikolabusiness model and evolving list of projects – from electric and fuel cell semi-trailers to singlepickup to be a manufacturer and distributor of hydrogen. But hydrogen infrastructure is a big part of the company’s value proposition, according to statements from executives and apresentation to investors in April.
Nikola plans to bundle the cost of hydrogen and maintenance with its fuel cell semi-trailers under a seven-year or 700,000 mile lease. To achieve this, Nikola aims to build a network of 700 gas stations across North America over the next eight to 10 years, according to afiling in March.
A deal could still happen as the startup, whose stock hascollapsed after reports from regulatory probes and allegations of deception, had a stated ambition to announce a hydrogen partner by the end of this year. Nikola denied the misleading investors.
Nikola’s talks with BP were first reported by The Wall Street Journal.
Nikola executives said the cost of hydrogen production borne by the company,claims will be $ 2.47 per kilogram, depending on its ability to purchase renewable electricity – solar, wind, hydro – at wholesale rates from utilities or energy partners.
The Phoenix-based company has an agreement withNel ASA to supply electrolysis and refueling equipment, and itrecently confirmed that it is looking for partners for the construction and operation of the stations themselves. Executives said during Nikola’s August 4earnings call they will announce a partner this year. Production of the fuel cell semi-trucks is expected to start in 2023 at the Nikola plant in Coolidge, Ariz., Which is underconstruction.
(Update the share price in the fourth paragraph)