Nikola wants to buy cheap electricity to make hydrogen

Nikola Corp., an electric-truck startup, seeks a deal with Arizona Public Service Co (APS) for a cheap electricity supply to produce hydrogen. The deal was unveiled in Nikola’s filing to Arizona Corporation Commission for approval in December.

Nikola plans to install 700 fuelling stations across North America in the next decade. Cheap hydrogen is the key to success for Nikola business model.

The company initial cost estimate for producing hydrogen was around $2.50/kg, which was based on sourcing power at a rate of 3.5 cents/kWh. However, under the proposed contract, APS offered a beneficial rate of about 2.76 cents/kWh. If approved, this would be a substantial achievement for Nikola.

The company remained in hot water since the short-seller accusations. BP has already ended its advanced talks on developing fuel stations with the company. Nikola also lost its project of jointly developing electric garbage trucks for Republic Services, a waste management company.