Tesla’s New Competition

Source: Ron Struthers  (7/12/23)

Ron Struthers has followed Tesla since its infancy and says hydrogen fuel cells and vehicles will be the next big rage, and he sees huge growth in green energy transportation. Struthers discusses one company that he believes has lined up all the ducks in order to benefit.

First Hydrogen Corp. (FHYD:TSX; FHYDF:OTC; FIT:FSE) TSXV:FHYD OTC:FHYDF

Shares outstanding – 70 million approx.

First Hydrogen is based in Vancouver and London, UK, focused on zero-emission vehicles, green hydrogen production and distribution, and super-critical carbon dioxide extractor systems. The company has designed and built hydrogen-fuel-cell-powered light commercial demonstrator vehicles (LCV) under two agreements with AML Powertrain and Ballard Power Systems Inc. This graphic on their home page shows the FCEV and some bullet points.

These vehicles are currently being trialed with an initial 16 fleet operators in the United Kingdom.

On June 26, First Hydrogen’s FCEV was delivered to U.K. utility SSE PLC. The FCEV will begin real-world trials at SSE’s operational site at Aberdeen, Scotland, and surrounding areas, which features some of the U.K.’s best hydrogen infrastructure. This infrastructure will enable SSE to experience easy and fast refuelling within five to seven minutes, showcasing a significant advantage of the company’s FCEV over battery electric vehicles (BEV), which typically take hours to recharge.

The FCEV has some good reviews/praise such as in May from award-winning fleet management provider Rivus for its smooth and pleasant driving experience. Rivus drivers noted the capability to manage greater ranges and refuel much faster than battery electric vehicles, which will help fleets using this vehicle class to switch to meet zero emissions targets. Following initial journeys on roads in Birmingham, the West Midlands, and South Yorkshire, Rivus’ drivers have complimented the vehicle for its “effortless” and “comfortable” driving. Drivers were particularly impressed with the automatic transmission, which they appraised as “easier than a petrol or diesel van to operate” as it does not require gear changes and the vehicle is much quieter to run. Rivus, which manages approximately 120,000 vehicles, including approximately 85,000 LCVs, is the first fleet management company to test drive the first-of-its-kind hydrogen vehicle on U.K. roads.

The company has a very experienced and strong management team. FHYD is led by Malraj Mann, chairman and CEO, who has 40+ years of experience in corporate finance, acquisitions, and financial reporting for both private and public companies.

Rob Campbell is CEO-Energy with 40+ years engineering, commercial, and executive experience, including Chief Commercial Officer at Ballard Power Systems. He has held various previous leadership roles in energy and technology space (including solar and hydrogen).

Steve Gill is CEO- Automotive with 30+ years in automotive, with 20 years with Ford Motor Company (final role: Director, Powertrain Engineering at Ford of Europe); Board Director Ford Technologies; 11 years with Perkins Engines; (final role: Chief Engineer).

Allan Rushforth is CCO-Mobility with 30+ years in automotive and mobility. He has held senior leadership roles in automotive sales, distribution and service, including Marque Group, Lookers, Nissan, Hyundai and Volkswagen/Audi. International experience includes Japan, Korea, and Germany.

First Hydrogen is also active in Canada and has finalized land option agreements with the City of Shawinigan, Quebec. Next they signed a feasibility study agreement with Sacre-Davey for the development of a 35-megawatt green hydrogen production facility and vehicle assembly factory in Shawinigan. The purpose of the feasibility study is to establish the technical and market analysis, engineering review, analysis of grid and water constraints, permitting requirements, environmental constraints, and a review of distribution and operations. The overarching theme throughout the study is to recognize the combined aim to create a zero-emission hydrogen ecosystem.

The production facility will use advanced electrolysis and supply the company’s hydrogen-fuel-cell-powered vehicles (FCEV), as well as support other hydrogen-fueled vehicles and applications in the Montreal-Quebec City region. The company’s planned FCEV assembly factory will be designed for annual production of 25,000 vehicles per year when at full capacity and will represent a major boost to green technology jobs in the region. The distribution of First Hydrogen’s FCEV, throughout North America, will be in combination with the company’s hydrogen-as-a-service product offering.

It is very early days for First Hydrogen but it will have a far easier path than Tesla did. Tesla was met with much skepticism and doubt as North America’s first EV producer. Now governments and large investment funds are pouring oodles of money into the EV and hydrogen markets.

So far First Hydrogen’s FCEV has accumulated 6,000 kilometers on United Kingdom roads, including mileage around London’s M25 motorway. The data logging supports vehicle range simulations, which exceed a 500-kilometer range. The vehicle is currently performing with excellent efficiency, including both urban, extraurban (which includes driving at higher speeds), and highway operations. First Hydrogen’s LCV fuel consumption figures seen in many driving scenarios are under two kilograms per 100 km, and in mostly urban driving this is 1.5 kg/100 km.

Conclusion

First Hydrogen is at the very beginning of its growth cycle. It will have revenues from selling FCEVs that have now reached acceptance and I expect will soon see major purchase orders. The company has partnered with the Quebec University and numerous other government, investor, and industry partners in the sector. It is not doing this alone. First Hydrogen will also make revenues producing and selling hydrogen.

There is enormous government support for hydrogen in Western countries. In Canada’s recent budget, programs supporting First Hydrogen include investment tax credits for clean hydrogen ($17.7 billion) and zero-emission technology manufacturing ($11.1 billion), as well as lower tax rates for zero-emission technology manufactures ($1.3 billion). The federal incentives are in addition to incentive programs offered by the province of Quebec, which the company has picked for its first green hydrogen eco-system.

The stock ran up last year with good news from the company and Canada officially getting behind hydrogen. PM Justin Trudeau and German Chancellor Olaf Scholz met in Newfoundland, Canada, creating an alliance between Canada and Germany. The joint declaration of intent to invest in hydrogen and establish a transatlantic Canada-Germany supply corridor will be the start of establishing Canada as a significant hydrogen producer and advancing on its decarbonization path.

The stock has come down after what now looks like too much hype in the sector, but has put in a bottom and current prices look like an attractive entry point. There is not much resistance until around $3.40 and the the $4.00 area.

Important Disclosures:

1. First Hydrogen has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of First Hydrogen.
3. Ron Struthers: I, or members of my immediate household or family, does not own securities of First Hydrogen. My company does not have a financial relationship with First Hydrogen. I determined which companies would be included in this article based on my research and understanding of the sector.
4. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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