Inflation Reduction Act is a ‘triple win’ for Nikola

Inflation Reduction Act (IRA) incentives will drive down the production costs of low carbon hydrogen, reduce infrastructure costs for the construction of hydrogen dispensing stations, and cut the cost of ownership of a Nikola FCEV, the truck maker announced today.

Nikola highlighted three areas which will reduce the cost of vehicle manufacturing and accelerate customer acquisition.

  • The expansion of Nikola’s Coolidge manufacturing facility may benefit from an up to 30% Advanced Energy Project Credit (48C) through a $10bn grant for advanced energy projects that expand manufacturing facilities for the production of heavy-duty battery-electric vehicles (BEVs) and FCEVs.
  • Nikola may benefit $10 per kWh from the Advanced Manufacturing Production Credit (45X) for producing battery modules for BEVs and FCEVs, in the event Nikola produces battery modules in-house.
  • Additionally, the new $40,000 Commercial Clean Vehicle Credit (45W) may reduce the upfront purchase cost of a Nikola Tre BEV or FCEV vehicle for fleets looking to transition from carbon-emitting Class 8 diesel engines.

The Alternative Fuel Refueling Property Credit (30C) is another key benefit and will support Nikola’s plans to build with its partners up to 60 dispensing stations by 2026. This provision promotes station development by offsetting the cost of construction for up to $100,000 per dispensing equipment item. When considered against the cost of a station, this could provide a significant reduction in cost, it said.

The IRA benefits for dispensing infrastructure, when combined with state hydrogen dispensing incentive programs such as California’s Low Carbon Fuel Standard (LCFS), will allow low carbon hydrogen to earn an additional $1.00$2.00 per kilogram of hydrogen dispensed into a Nikola Tre FCEV.

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