Oil Giant Total Leads Investment Into Fuel-Cell Truck Maker Hyzon

Total SA is leading an investment round into US fuel-cell truck maker Hyzon Motors as part of the French energy company’s target to reach net-zero emissions by 2050.

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Total (TOT) said that the strategic investment is made by its European venture arm Total Carbon Neutrality Ventures and other specialist hydrogen investors, including Ascent Hydrogen Fund, Hydrogen Capital Partners and Audacy Ventures Ltd. The terms and size of the investment weren’t disclosed but according to Bloomberg they totaled more than $15 million and valued Hyzon at around $200 million. It could rise to $20 million, according to the Bloomberg report.

The investment will help ramping up Hyzon’s manufacturing and support engineering centers in Honeoye Falls in New York, Groningen in the Netherlands and Shanghai in China. Hyzon already has around 400 commercial buses and trucks on the road using its own fuel-cell technology.

Hyzon CEO Craig Knight pointed out that the global appetite for zero-emission heavy vehicles has grown significantly and that the company is now boosting its operations to meet this demand.

“Total Carbon Neutrality Ventures invests in early stage companies which support Total’s ambition to get to net-zero emissions by 2050. Its investments allow us to expand the reach of our low carbon- businesses beyond our own borders,” said Girish Nadkarni, CEO at Total Carbon Neutrality Ventures. “Total is now moving forward in decarbonizing not only mobility -and notably heavy-duty transport- but also industry and energy.”

Hyzon was established in the US in January this year as a spin-off from Singapore-based Horizon Fuel Cell Technologies. The company is a global supplier of zero-emissions hydrogen fuel cell powered commercial vehicles, including heavy duty trucks, buses and coaches. The company

With production facilities in North America, Europe and Asia, Hyzon expects to deliver around 5,000 fuel cell trucks and buses over the next 3 years. By 2025, Hyzon’s expected turn-key capacity will be more than 40,000 fuel cell vehicles annually.

Shares in Total have been hard hit dropping 36% so far this year as the coronavirus pandemic pushed energy prices down and demand is weak. Looking ahead, the $39.70 average analyst price target forecasts 13% upside potential in the shares in the next 12 months.

For CFRA analyst Jia Man Neoh, who last month reiterated a Buy rating on the stock with a $43 price target, the recent headwinds represent an attractive value opportunity. Neoh notes that Total has a historic record of generating steady growth regardless of external conditions. In addition, the analyst points to the company’s robust pipeline of projects in the works and its healthy balance sheet.

Overall, Wall Street analysts share Neoh’s bullish outlook on the stock. The Strong Buy consensus rating shows 5 Buy ratings versus 2 Hold ratings. (See Total’s stock analysis on TipRanks)