Pertaining to Nikola (NKLA), which aims to produce hydrogen-powered vehicles, there is a widely-publicized “Short seller” report against the firm. An invalid bet against a publicly-traded stock can be a great opportunity to take the other side of the trade, the recent Herbalife conflict is an example. However, Nikola itself scarcely offers any products, has formidable obstacles to overcome–and might need a partner other than General Motors–if it is ever to do so. Further, the actual qualities of those same products need to differentiate them from competition. Currently Hyundai, and maybe Toyota, have a lead entering the domestic market with fueling stations and heavy trucks.

Outside of, encompassing, or enveloping hydrogen transportation are environmental issues. Virtually anyone can take to the streets during summer months and demand that no one use sources of energy that produce emissions. However, provided we still have winter, it would not be as easy to carry on as normal then if there is no heat, hot water, or means to cook. 

So, we cut down on coal, maybe eliminate its use (MDU Resources uses it in stretches of the Northwest, for example). Its emissions are particularly dirty. We have renewable energy sources, such as wind, solar and hydroelectric power in some parts of the country. 

Assuming consistent use of nuclear power, we have got to find a way to replace 36.7 + 32 + 11.3 = 80% of our national energy consumption. 

Which would be true if the electricity used to charge those vehicles–perhaps through resonant, as opposed to inductive, methods–is generated from a clean source(s). Referencing the graphic above, arithmetic says that the sum total of renewable electricity generated is 11.4% of consumption. If rural drivers get their electricity from MDU Resources, the above statement on emissions elimination probably would not hold water.

On the other side of the issue, we have the Beacon Hill Institute (BHI), which claims that 

Energy products have very low responses, or elasticities, to price…changes.

BHI’s report then makes calculations about the effects of increasing fuel prices, including projections several years into the future.  

So, the issue with BEVs is that, though they run on electricity and do not produce any emissions while driving, the electricity has to come from somewhere. If 10% of personal vehicles are garaged in homes that have newer solar panels that charge the means of transport then elimination of GHG emissions is a valid claim. However, if rural areas have electricity that is generated by coal, then conventional gasoline or diesel personal vehicles should be cleaner.

A problem with BHI’s projections is that petroleum products have higher responses to price change in the long run when compared to the short run (I, II, III). Thus, consumers would buy less gasoline in 2025 if its price went up today and remained higher through then. 

There is pressure on oil companies. Most recent news is that BP, plc is hesitant toward a partnership with Nikola, but the energy major is among those who could benefit through transforming its identity by means of hydrogen fueling stations. If a regional tax or fee structure on gasoline and diesel is enacted in 2022, the quantities of fossil fuel bought and sold should decrease toward the middle of the decade. 

In the meantime, Nikola, Toyota, and Hyundai should be working toward implementation of hydrogen transport.

**The author owns a higher number of shares of NKLA than previously, though volatility does not help.