A rendering of the Phoenix Hydrogen Hub. (Fortescue Future Industries)

Truck maker Nikola agreed to sell its Phoenix Hydrogen Hub project to partner Fortescue Future Industries for $24 million, the companies said.

Nikola teamed up with Australia-based FFI to develop the Buckeye, Ariz., project, with a memorandum of understanding signed in January. FFI is a unit of one of the world’s largest iron ore producers, Fortescue Metals Group.

FFI has the funds and resources — its parent company has a market capitalization of more than $47 billion — required to fully develop the green hydrogen project, Nikola said, and the companies are working on a fuel supply deal for Nikola’s Class 8 trucks.



The transaction unloads capital commitments for cash-strapped Nikola and is the latest in a series of positive developments for the Phoenix-based company, which plans to manufacture heavy-duty, hydrogen-powered trucks and develop a refueling infrastructure alongside that, analysts say.

Phoenix Hydrogen Hub is expected to produce its first fuel by “the middle of this decade,” Nikola said, adding that the project is in the final stages of the permitting process.

FFI said the deal was “its first major move in the United States” after the Inflation Reduction Act was passed in 2022. Phase One of the project is set to be an 80-MW electrolyzer and liquefaction facility, which will be able to produce up to 12,000 metric tons of liquefied green hydrogen annually, the company said.

The expected initial output of the facility is enough to displace 10 million gallons of diesel consumption per year, FFI said, adding that the site could scale up production to help meet future demand.

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Jeffrey Kaufman

Vertical Research Partners analyst Jeffrey Kaufman 

Developments such as the Phoenix hub are the “first drops in the bucket” for the creation of a hydrogen production and refueling infrastructure network that would benefit U.S. carriers looking to decarbonize their fleets and meet Nikola’s fuel needs, Jeffrey Kauffman, Vertical Research Partners analyst, told Transport Topics on July 20.

Elsewhere in the U.S., FFI is evaluating the feasibility of converting a former coal mine into a green hydrogen production facility in Centralia, Wash.

Driven by mining mogul and green hydrogen promoter Andrew Forrest, FFI is working on green hydrogen projects in 10 countries.

What in the World?

Fortescue Future Industries has green hydrogen projects in:

• Argentina

• Australia

• Brazil

• Canada

• Egypt

• Germany

• Kazakhstan

• Namibia

• Papua New Guinea

• United Kingdom

Nikola, meanwhile, is diversifying its hydrogen supply infrastructure outside the project in its home state.

Earlier in July, the company inked a deal to buy hydrogen from Albuquerque, N.M.-based BayoTech. Nikola is set to begin taking delivery of low-carbon hydrogen from BayoTech in Missouri this year and from 2024 onward in California, it said.

Nikola also plans to acquire up to 10 HyFill transport trailers from BayoTech, which will enable distribution of hydrogen between production sites and refueling stations.

In turn, BayoTech will buy up to 50 Nikola fuel cell electric vehicle semis over the next five years to make deliveries. The first 12 are scheduled to be delivered this year and next. FCEV manufacturing at Nikola’s Coolidge, Ariz., factory is set to begin before the end of July, sources close to the company say.

In May, Nikola teamed up with Herndon, Va.-based infrastructure specialist Voltera to develop up to 50 hydrogen refueling stations. Voltera is backed by Swedish investment group EQT.

Previously, the company also inked deals with TC Energy and Wabash Valley Resources to produce and source low-carbon hydrogen in Canada and Indiana.

The financing of Nikola’s ambitious expansion plans received a recent boost. On July 17, Delaware Gov. John Carney approved an amendment to Section 242 of the Delaware General Corporation Law.

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Under the amendment, the threshold for amending a company’s certificate of incorporation to increase its authorized share total would switch from a majority of the outstanding common stock to a majority of the shares voting on the proposal.

Until now, Nikola had been unable to secure enough votes to approve a share issue it argues is vital to financing production of the Tre FCEV Class 8 truck.

Nikola adjourned its annual meeting for a second time July 6 after failing to win enough shareholder support. The adjournment was until Aug. 3. Delaware’s amendment will be effective Aug. 1.

“While the company is not yet out of the woods in terms of capital raise or cash burn, that path is becoming clearer and appears more achievable. It is looking like Nikola will be in a position to see itself to 2025-2026, when cash flow break-even could be occurring,” Vertical Research Partners’ Kauffman said in a July 19 research note issued before the FFI deal was announced.